Xstrata makes $3.1bn bid for JubileeOctober 29, 2007 -...

Xstrata makes $3.1bn bid for Jubilee
October 29, 2007 - 9:23AM
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UK-listed mining giant Xstrata has made a $3.1 billion off-market takeover bid for Australian nickel miner Jubilee Mines.
The offer, through subsidiary Ithaki Australia Pty Ltd, involves an all-cash offer of $23 per share, representing a 35 per cent premium over Jubilee's closing price of A$17.10 October 26.
It represents a 36 per cent premium over the volume weighted average price of Jubilee shares over the last 30 trading days on the ASX, and a 25 per cent premium to Jubilee's all time record high share price, Jubilee said this morning.
Jubilee and Xstrata have entered into a binding agreeement over the all-cash offer.
Jubilee's board has recommended the offer unanimously.
The Offer will be financed through Xstrata's existing credit facilities and cash on hand.
"Xstrata's bid offers shareholders a compelling opportunity to realise in cash the substantial growth in value created by their investment at an attractive point in the commodity cycle and equity markets overall, without taking on the risks associated with the next phase of Jubilee's development," Jubilee executive chairman Kerry Harmanis said this morning.
"Jubilee is ... at an important stage and will benefit from the deeper capabilities and balance sheet of a major mining company such as Xstrata to maximise the potential of its resource base."
Xstrata Nickel chief executive Ian Pierce said Jubilee had an established record of creating shareholder value.
"Jubilee offers Xstrata Nickel immediate access to additional production, geographic diversification and introduces substantial near term growth potential into its portfolio," Mr Pierce said.
"In particular, the combination of two of the most successful exploration teams in the nickel industry, together with Jubilee's highly prospective regional land position, offer excellent prospects for significant additional growth in the region."
Jubilee announced last week a jump in annual net profit, from $103.4 million in 2005/06 to $173.1 million in 2006/07.