sundance hints at talks with rival bidders

Sundance hints at talks with rival bidders

Peter Kerr, The West Australian
September 20, 2012, 5:29 am
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Sundance Resources has given the clearest signal yet it is in talks with rival bidders to unpredictable takeover suitor Hanlong Mining.

Chairman of the Perth-based but African-focused iron ore miner George Jones told _WestBusiness _ that while the most likely outcome was for the revised Hanlong deal to proceed, the company was exploring other avenues.

"Part of the rearrangement is that we are now free to shop the transaction and we are looking at all our options," he said. "We have got people in China and Africa and some in Paris working on other things, so it is a pile of work going on, and it is all progressing."

When pressed whether his advisers in Paris were working on a deal for a new bidder, Mr Jones declined to comment but admitted Sundance was wary of another attempted renegotiation by China's Hanlong amid faltering iron ore prices.

"You can't rule out anything in life but it (a renegotiation) won't be welcome and we are doing everything we can to make sure there is competitive tension," he said.

"There is now the opportunity for other people to have a look at it. The benchmark has been lowered. It was 57¢ they had to beat - now they only have to beat 45¢."

Sundance last month agreed to the revised 45¢-a-share takeover from Hanlong provided an exclusivity provision was removed from the deal.

The bid valued the company at $1.37 billion - down from Hanlong's original 57¢-a-share bid last October which priced Sundance at $1.65 billion. A shareholder meeting on the takeover is due at the end of November, assuming that Sundance wins mining licences in the Congo by the end of this month.

As part of the deal it also has to gain mining concessions in Cameroon next month and Hanlong must win funding approval from the Chinese authorities.

Mr Jones said he was confident it would secure all approvals for the Mbalam project which straddles the Cameroon and Congo borders.

"Don't lose sight of the fact that it is a world-class deposit, it is in the bottom of the bottom quartile of the world for costs," he said. "It will be about $US20 a tonne operating costs. At any (iron ore) price it is bulletproof."