rdi proposal, page-11

Palmer launches takeover of WA iron firm
24-July-08 by Rebecca Lawson


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Australasian Resources Ltd today confirmed that it has received a merger proposal from billionaire Clive Palmer's Resources Development International Ltd, which is currently finalising plans for a $5 billion initial public offer.

News of the proposal sent shares in the Perth-based company, which were previously in a trading halt, up to $1.65 in early morning trade, a jump of over 38 per cent.

At 10:31 AEST shares last traded at $1.60.

Under the current proposal, the merger will be an all scrip deal with RDI to acquire all shares in Australasian for shares in RDI, with the proposal placing an estimated price of $2.20 on each Australasian share.

With RDI's IPO yet to be finalised, the total number of shares proposed to the offered to Australasian shareholders is yet to be determined.

"If the proposal is implemented, ARH shareholders would exchange their ARH shares for RDI shares and collectively hold a significant minority interest in the total RDI shares on issue," Australasian said in a statement.

The Perth company said the proposed merger would be conditional on RDI listing on the Hong Kong Stock Exchange which is expected by the end of this year. There are also plans for RDI to list on the Australian Securities Exchange.

Mr Palmer already holds about 66.4 per cent of Australasian while the company's two directors Domenic Martino and Clive Mensink are also directors for RDI.

RDI was recently formed to acquire iron ore, nickel, exploration and energy interests, including rights to 20 billion tonnes of iron ore on the Balmoral tenements held by Mr Palmer.

Australasian's development partner for the Balmoral South iron ore project, Shougang, is said to be open and receptive of the merger proposal.

As a result of the proposal, Australasian said plans to demerge International Exploration Ltd and negotiations with Mr Palmer to acquire the right to mine additional tonnes at Balmoral South have been put on hold pending the outcome of the proposal.

Earlier this month, RDI forged an alliance with Melbourne-based MEO Australia Ltd which holds gas permits in Western Australia.

RDI will fund MEO's exploration costs in the WA projects to earn a 35 per cent interest in each.