MagIndustries agrees to C$115m bid from Chinese...

MagIndustries agrees to C$115m bid from Chinese group

http://www.miningweekly.com/article/magindustries-agrees-to-c115m-bid-from-chinese-group-2011-04-20

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TORONTO (miningweekly.com) ? MagIndustries, which owns potash properties in the Republic of Congo, has agreed to a C$115-million takeover offer from Chinese group Evergreen Industries, it said on Wednesday.

The C$0,25 a share bid represented a 64% premium to the stock?s 20-day volume-weighted average up to Tuesday.

MagIndustries rose 50% in Toronto morning trade, with the shares reaching $0,225 apiece by 10:59.

The company said in March that it had received approaches from several companies interested in gaining access to its Mengo potash project and was pursuing talks with an industrial group.

?Over a period of several years, MagIndustries has thoroughly reviewed, analyzed and assessed all the possible options for the company to finance the Mengo project and we have now come to the conclusion that the Evergreen's offer is the best available option to our shareholders and to the company,? chairperson Gerard Munera said in a statement.

Conditions to the bid included a minimum two-thirds acceptance by TSX-listed MagIndustries? shareholders.

The company said it would provide full details of the bid in a circular it will send out mid-May.

Beijing-based Evergreen?s website says the group is involved in ship building, marine engineering, natural resources and logistics, and has over 25 000 workers. The company is chaired by Simon Liang.

In February, Taiwan-based TSC Capital said it had decided to pull out of a deal that would have seen it buying a 55% stake in MagIndustries for C$185-million. This would have satisfied the equity component the company needed to build the mine.

Potash is used as a crop nutrient.

Before the deal was scrapped, TSC partner, and South African mining personality Rick Mennel, had said he believed the ?Mengo potash project has high potential value?.

MagIndustries said in February it failed to agree ?on final financial terms? with TSC.

The company since appointed BMO Capital Markets as financial adviser to find other partners, and extended the bank?s contract in March.