Cape Alumina (ASX:CBX) directors have recommended that shareholders accept MetroCoal’s (ASX:MTE) off-market takeover bid of 1 MTE share for every 1.3 CBX shares, in the absence of a superior proposal.
The offer represents a 35% premium to the 20 day VWAP for each Cape share and the independent expert has concluded is both fair and reasonable.
If the takeover is successful, the merged entity will hold extensive bauxite tenements in Cape York including the Bauxite Hills Project as well as interests in over 4 billion tonnes of thermal coal in the Surat Basin.
Cape’s directors noted that successful development of Bauxite Hills will require significant additional funds in the short term, which MetroCoal is able to offer.
The combined company will also have better access to funding and better prospects for development.
Bauxite Hills has a 60 million tonne bauxite resource and is undergoing work to define its potential as a DSO operation.
It is located just 5 kilometres southeast of the existing port and Skardon River and 95 kilometres north of Weipa.
