news item from The Australian

From The Australian...FYI Sundance Resources weighs lower Hanlong bid Sarah-Jane Tasker August 02, 2012 12:00AM Source: The Australian "SUNDANCE Resources was last night reviewing a reduced takeover offer from Hanlong Group after China's top economic planner gave the deal provisional approval on condition the offer price was lowered. Shares in the Australian-listed company remained in a trading halt yesterday pending an announcement on the deal by China's National Development and Reform Commission. Perth-based Sundance did not update the market yesterday and neither side could be contacted, but market speculation suggested the commission had approved the deal but wanted the offer price reduced from 57c a share to 50c, valuing the target at $1.5 billion. Sundance shares had fallen 2.9 per cent to 33c on Tuesday before the trading halt. The deal was proposed in July last year at 50c a share but the Sundance board rejected the offer as too low before a revised bid of 57c was backed by the target in October. Delays to regulatory approvals and exploration permits delayed the original May 2 implementation date, and in that time the iron ore price has weakened and sentiment on China's economic growth has wavered. As the deal has drawn out, the market had questioned whether China would still be comfortable with the offer price, and a reduced bid would not come as a surprise. Falling iron ore prices and volatile market conditions have led major miners to flag a slowdown on growth projects and deal activity is expected to be subdued until signs of a more positive outlook emerge. News on the offer came a day after former Hanlong vice-president Calvin Zhu pleaded guilty to three charges of insider trading. The charges related to profits made trading in companies including Sundance. At stake in the Sundance deal is the Mbalam iron ore project on the border of the republics of Cameroon and Congo. In June 2010, all the board members of the company were killed in a plane crash during a visit to the project. Those killed included mining billionaire Ken Talbot, chief executive Don Lewis, company secretary John Carr-Gregg and directors Geoff Wedlock, John Jones and Craig Oliver. Hanlong became Sundance's largest shareholder in March last year when it acquired the 16 per cent of the shares in the company that had been held by Mr Talbot's estate. Although it is privately owned, Hanlong requires approval from the commission before it can proceed with the Sundance takeover. China's NDRC was meant to have handed down its decision last month, but Sundance agreed to a one-month extension on that approval, which was due on Tuesday. The NDRC's sign-off is mandatory for both state-run and private firms that are planning offshore investment and seeking access to discounted financing from China's state-controlled banks. Hanlong not only needs $1.5bn to fund the deal but will also need to source about $4.8bn to develop the project. The development will include a new deepwater port and heavy haulage railway connecting the mines to the port. Stage one of the project is targeting annual production of 35 million tonnes of direct shipping ore for 10 years, followed by 35 million tonnes per annum for an additional 15 years in stage two."