BC Iron (ASX:BCI) is set to strengthen its Pilbara iron ore portfolio via an off-market takeover offer for Iron Ore Holdings (ASX:IOH).
BCI is offering 0.44 new BC Iron shares and $0.10 in cash for each IOH share to create a leading mid-cap iron ore company.
The merged entity will have strong operating cash flows from Nullagine and Iron Valley, and an unaudited pro forma cash balance of $190 million as at 30 June 2014.
It will also boast the technical and financial platform to develop the Buckland project, and a proposed private haul road and port at Cape Preston East, for Buckland and potential third party tonnages.
The offer values IOH at $1.59 per share based on BC Iron’s 60 day VWAP of A$3.39, a 79%
premium to IOH’s 60 day VWAP of $0.89.
IOH has unanimously recommended that IOH shareholders accept the offer in the absence of
a superior proposal, and two nominees from IOH will be invited to join the BC Iron board.
In addition, BC Iron expects to announce a fully franked, final dividend for FY14 of $0.15 per share.
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