PERTH (Dow Jones)--Malaysian steel maker Lion Diversified Holdings may launch a competing takeover offer for Australia's Polaris Metals NL (POL.AU), a person familiar with the situation said Friday.
Perth-based Polaris last week agreed to a friendly all-share bid from Australia's Mineral Resources Ltd. (MIN.AU), which values the target at around A$75 million.
But an alternative cash offer by Lion, which owns 25.5% of Polaris, is "a possibility", the person told Dow Jones Newswires.
The Malaysian company is considering its options and not expected to show its hand until the receipt of Mineral Resources' bidders statement for Polaris, due out mid-September, the person said.
Earlier Friday Lion in a statement expressed concerns about the current bid.
"We do not believe that Minerals Resources' conditional scrip offer adequately reflects the value of Polaris' underlying assets," the company said in a statement.
"It appears to us the Polaris board may have rushed into recommending this potential transaction, which may not be in the best interests of the minority shareholders," the statement said.
Lion sees Polaris, particularly its Yilgarn iron ore project in Western Australia, as a "good asset and potentially a strategic opportunity", the person said. "They are a steel maker, so the commodity is of interest to them."
The Malaysian group may also be interested in "partnering" an iron ore development with "suitable people", the person said.
Lion Diversified, part of Malaysia's Lion Group conglomerate, took an initial 9% stake in Polaris in January 2007.
An executive from Polaris was not immediately available for comment.
Polaris directors have recommended the Mineral Resources bid in the absence of a superior proposal and subject to a favourable Independent Expert's Report.
Polaris' other major shareholder, Heron Resources Ltd. (HRR.AU) has entered into a pre-bid acceptance agreement with Mineral Resources in respect of 19.9% of Polaris' shares.
-By Stephen Bell, contributing to Dow Jones Newswires; 61-8-9244-4243; [email protected]
POL Price at posting:
41.5¢ Sentiment: Hold Disclosure: Held
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