Seems like back flipping herePalmer concession for smaller...

Seems like back flipping here



Palmer concession for smaller investors in takeover target

7th August 2008, 7:45 WST



Iron ore billionaire Clive Palmer has caved in to demands from smaller shareholders in takeover target Australasian Resources by agreeing to offer them Australian-listed shares in his new vehicle, Resource Development International.

The concession emerged yesterday as part of a merger implementation agreement between Australasian and RDI.

The agreement included RDI marking a potential dual-listing on the Australian Securities Exchange immediately rather than initially only on the Hong Kong Stock Exchange, as was originally proposed.

It is understood that some shareholders had baulked at the prospect of being left holding Hong Kong-listed stock.

In another win for shareholders, RDI has pledged to allow investors who would be left holding less than $5000 of RDI under the merger to effectively accept a cash payment, by selling out of RDI immediately and without paying brokerage.

Australasian emerged from a trading halt yesterday afternoon to confirm details of the deal, which was first flagged last month when Australasian confirmed it had received a takeover offer from Mr Palmer’s RDI.

The company appointed RC Capital Advisors and boutique law firm McKenzie Moncrieff to assess the proposal.

Float advisers Macquarie Group and UBS are believed to be confident of raising the proposed $5 billion in RDI’s initial public offering, as well as up to $2 billion in oversubscriptions.

The proposed merger, which will be done by a scheme of arrangement, is RDI’s first step towards becoming a multi-billion-dollar diversified resources giant that can deliver key commodities into the Chinese market.

In addition to his extensive iron ore interests, Mr Palmer, who owns a 66.6 per cent stake in Australasian, is also expected to vend into RDI his stakes in gas junior Meo Australia, which has significant discoveries off WA’s North-West and plans for liquefied natural gas and gas-to-liquids plants; a controlling shareholding in London-listed Gladstone Pacific Nickel, the proponent of a $3.65 billion plant in Queensland; and his $5 billion east coast steel plant project.

RACHEL DONKIN

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