Kate Haycock --MINING NEWS -- Tuesday, 6 October 2009
A $A94 million takeover bid for iron ore junior Polaris Metals has been launched by Malaysian-backed joint venture Lion-Asia Resources.
Polaris is already the subject of a friendly takeover bid from Australia-listed mining services company Mineral Resources, which is offering $A67 million in scrip for the iron ore explorer.
Lion-Asia this morning announced it would offer 60c cash for each Polaris share, valuing Polaris at around $93.6 million.
Lion-Asia is a joint venture between Singapore-listed Lion AsiaPac and Tan Sri William Cheng Heng Jem, the chairman of Malaysia’s Lion Group which has interests in the steel industry.
Funding for the bid will come from Lion-Asia’s shareholders in equal proportions through cash reserves and bank debt.
Both Lion AsiaPac and Cheng are associated with Lion Diversified Holdings Berhad (LDHB), Polaris’ largest shareholder with a 26% stake, and last week rumoured to be considering a takeover for Polaris.
The bid is conditional on 50.1% acceptances of all shares - not including the LDHB stake or the 19.9% stake in Polaris owned by Heron Resources, which has been committed to the Mineral Resources offer.
The private company said today its bid offered a 100% premium to Polaris’ closing share price of 30c on August 14, the day before the Mineral Resources offer on August 20.
The 60c per share offer was a 19c premium to the implied value of the Mineral Resources offer of 50.4c per Polaris share on October 5, based on Mineral Resources’ closing share price of $6.30, Lion-Asia added.
The group also said its bid also offered certainty over the Mineral Resources offer, although the offer requires Foreign Investment Review Board approval.
Perth-based Polaris recommended Mineral Resources’ offer last month, saying it was the stand-out from a range of proposals for developing its Yilgarn iron ore project.
Polaris is assessing the Lion-Asia offer today, and noted Mineral Securities has already gained a 27% stake in the company under its original offer.
Polaris and mining services group Mineral Resources are already involved in the Poondano project in the Yilgarn.
Start-up is planned for the first half of 2010, initially targeting iron ore exports of more than 500,000 tonnes per annum through Port Hedland.
Shares in Polaris were last traded up 10 cents to 61c.
POL Price at posting:
60.5¢ Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)