more coverage on takeover

BHP tipped as likely bidder for UMC

KATE EMERY, The West Australian October 14, 2009, 6:19 am

United Minerals Corp could announce a takeover deal by the end of the week amid mounting industry speculation BHP Billiton is behind a $200 million-plus tilt at the Pilbara iron ore junior.

A week after UMC was surprised by the unsolicited offer, the Alan Birchmore-chaired board remains in confidential discussions with the bidder, widely believed to be BHP.

Analysts said the mining giant, advised by Gresham Partners, was a logical bidder given UMC's Railway orebody extends into BHP's tenements and is close to its railway.

Railway's high-quality blendable Marra Mamba-style mineralisation would also suit BHP's requirements.

However, it is thought that a deal is unlikely to be announced before Friday.

The bid is thought to have been triggered by UMC's proposed $27.2 million deal with China Railway Materials Commercial Corp, announced last month.

Under the deal, China Railway was to have acquired a 12 per cent stake in UMC, making any subsequent takeover by a third party more difficult. Analysts said UMC's board would be unlikely to back any bid below the $1.35 a share China Railway was to have paid for its stake.

Market speculation yesterday suggested a price of $1.40 a share was being considered, which would value UMC at $220 million.

However, negotiations are understood to be continuing.

Spokesmen for UMC and BHP declined to comment.

UMC shares, which remain suspended from trading, last traded at 91¢.

http://au.news.yahoo.com/thewest/business/a/-/business/6215003/bhp-tipped-as-likely-bidder-for-umc/