my thoughts, page-19

From the combined announcement from Indophil and Zijin, Zijin intends to lodge its bidders statement by no later than Friday 18 December.

From the Pre Bid Acceptance Deed between Xstrata and Zijin in relation to Xstrata's 19.99% shareholding in Indophil, the bidder (Zijin) needs to hold acceptances of at least 30.2% of the shares for acceptance notice to be given in relation to Xstarat's 19.99% shareholding.

The bidder also needs to have declared the bid free from all other defeating conditions.

At this point Zijin would be entitled to hold 50.19% of Indophil. (Quaere if a lawyer got their maths wrong by stating 30.2% instead of 30.02% in the pre bid acceptance deed).

What is interesting is that with the Alsons stake of approximately 3.45%, Lion Selection Group's 5.94% stake and those shares held by Indophil directors and related entites the acceptances by other shareholders could quickly reach 30.2% and the bid then be made unconditional by Zijin (if tehy want to do this).

This may mean shareholders accepting the bid at $1.28 may be paid quite quickly once Zijin's shareholding in Indophil exceeds 50.19%.

There may then be an arbitrage opportunity to accept the Zijin bid and be paid within say 5 days (but only at the point where the bid is unconditional) then buy the shares again on the market and repeat the exercise.

As its an off market bid and Zijin already hold 19.99% shareholding its my understanding that they can't buy the shares on the market.

I've done a similar exercise a few years back. Can't remember the stock but it was money for jam.

Top Twenty Shareholders
(as of 13 September 2009)
Name Number of Holders %
Xstrata Queensland Limited 78,594,711 19.99
National Nominees Limited 43,314,875 11.02
HSBC Custody Nominees (Australia) Limited - A/C 2 38,764,419 9.86
Lion Selection Group Limited 23,353,206 5.94
ANZ Nominees Limited (Cash Income A/C) 19,361,712 4.93
J P Morgan Nominees Australia Limited 15,825,050 4.03
Zero Nominees Pty Ltd 14,205,000 3.61
Alsons Corporation 11,100,000 2.82
Citicorp Nominees Pty Limited 9,253,972 2.35
HSBC Custody Nominees (Australia) Limited - GSCO ECA 7,779,025 1.98
HSBC Custody Nominees (Australia) Limited 7,022,701 1.79
Southcot Mining Corporation 4,279,630 1.09
Citicorp Nominees Pty Ltd (Cwlth Bank Off Super A/C) 3,938,489 1.00
Indophil Employee Share Plan Pty Ltd 3,114,780 0.79
Khalon Pty Limited 2,593,205 0.66
Alsons Development & Investment Corporation 2,476,900 0.63
Escor Investments Pty Ltd 2,200,000 0.56
CS Fourth Nominees Pty Ltd 2,130,415 0.54
Haustella Pty Ltd 2,012,105 0.51
Ardrilt Investments Pty Ltd 1,847,317 0.47