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Sundance rebuffs Hanlong?s 30pc discount bid

Peter Klinger, The West AustralianAugust 8, 2012, 7:41 am

Sundance Resources' board was last night fighting to keep its $1.7 billion takeover deal alive after refusing to bow to suitor Hanlong Mining's demand for a 30 per cent price cut.

The fierce negotiation is set to test the relationship between corporate Australia and China Inc amid concerns that agreed deals are not being honoured.

Hanlong and its advisers have told Sundance they want the takeover price cut to 40¢, compared with the initial price of 57¢ agreed by both parties last October.

Sundance is resisting, insisting that any reduction in the takeover offer must not drop the price below 50¢, although the Perth company is also acutely aware of the potential share price damage should Hanlong walk from the deal.

It is understood that the Sundance board, led by chairman George Jones who is overseas, is furious that Hanlong has reneged on the initial 57¢ bid price.

Although there is acceptance within Sundance that the volatility in global financial markets amid a deterioration in economic conditions may warrant a cut to the bid price, the board is unhappy that Hanlong is trying to strong arm its way into a 40¢ offer, a 30 per cent discount on the original price.

There are already concerns within corporate Australia that Chinese groups do not always honour contracts, with the Sundance situation likely to increase cross-border tensions.

Neither Sundance nor Hanlong could be reached for comment.
Sundance shares, which last traded at 33.5¢, remain suspended from trading while the negotiations con