Patience is a virtueThe handful of institutions that held out...

Patience is a virtue



The handful of institutions that held out against Cleveland-Cliffs’ $685 million takeover of Portman Mining in 2005 have been well rewarded for their patience.

The US iron ore producer offered $3.40 in its first pitch for Portman at the start of 2005 before lifting the bid to $3.85 and winning support from the board and acceptances from just over 80 per cent of its target’s shares.

Now, after buying some shares under the creep provisions in the intervening years, Cleveland-Cliffs is back with a mop-up bid for the outstanding 14.81 per cent stake with an offer of $21.50 a share.

This price is 20 per cent above Portman’s last trading price of $17.80, and 12 per cent above Portman’s record high of $19.17, and values the outstanding shares at $560 million. Cleveland-Cliffs, emphasising its generosity, says this is the final and only offer.

The bid is once again being handled by Wayne Seabrook of Wilson HTM Corporate Finance, while Nigel Hunt is doing the legal work.

Portman has retained Simon Price from the Perth-based advisory firm Azure Capital, despite having used Michael Ashforth of Gresham Partners in the previous offer. Blake Dawson is again doing the legals while KPMG will prepare an independent experts report.

A mop-up of Portman might lead to speculation about its intentions for Golden West, in which Portman has accumulated a strategic holding of 19.9 per cent in its fellow iron ore producer.