From Australian today twiggy confirms rejects offersFortescue...

From Australian today twiggy confirms rejects offers

Fortescue Metals Group rejects its ardent suitors

* Michael Sainsbury, China correspondent
* From: The Australian
* April 12, 2010 12:00AM

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ANDREW Forrest's Fortescue Metals Group has spurned preliminary approaches from major global mining groups to take over the $15.5 billion company.

Mr Forrest, FMG's chief executive, would not say who the potential suitors were, but other sources said that European-based Arcelor-Mittal, the world's largest steel-maker, and London-based Anglo American were among the companies that had visited Fortescue production sites in Western Australia.

"We are getting some very serious interest," Mr Forrest told The Australian.

"I had an approach last January when we were right in the middle of the crash, and I said we are so uninterested it doesn't matter."

Last January, Fortescue's share price fell below $2 after hitting highs of $60 during the heady days of the market boom. It has since recovered to close at $5.01 on Friday.

Start of sidebar. Skip to end of sidebar.
Related Coverage

* Fortescue asks more for ore The Australian, 2 Dec 2009
* Iron ore at historic crossroads The Australian, 27 Nov 2009
* FMG offered $1bn by Wall St: Forrest The Australian, 12 Nov 2009
* FMG leaves China door open Perth Now, 20 Oct 2009
* FMG leaves funding door open The Australian, 19 Oct 2009

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Interest in Fortescue from rivals -- as well as from long-disdainful stockbrokers and fund managers -- is mounting, now that it is on the way to mining more than 40 million tonnes of iron ore each year.

"We remain positive on iron ore and iron ore stocks," Goldman Sachs JB Were said in a research note. However, with FMG, the lack of clarity in the accounts, combined with the debt levels, capex spend and expansion plans, leaves us with a neutral recommendation."

Mr Forrest said that the cynicism that had long been directed his way also showed a lack of understanding about the enormous opportunities in China. "Why don't people take China seriously?" he said.

"You open just about every newspaper and they (China) are always doing something wrong."

Mr Forrest said there were now "a number of financial institutions lining up" to get into his company.

"They are all asking about new parcels of shares, but we point at the share register and say don't quibble about $5.05 -- tomorrow it will be $5.50."

Fortescue is also trying to drum up interest offshore, with Mr Forrest last week speaking at the annual Goldman Sachs resources conference in New York.

"We were just back to back," he said. "We had dozens of institutions each day."

Mr Forrest also reiterated that the company had had interest from a number of Chinese and Indian businesses in its plan to sell up to half its shares in its massive lower-grade iron ore holdings.

But despite talking up internal funding from the company's own cashflows for the second stage of its Chichester mine that hold 95 million tonnes of iron ore, Mr Forrest hinted that he was still exploring the debt funding that eluded him last year when he was seeking $7.5bn from Chinese banks for a massive acceleration of his plans.

At a media conference in China at the weekend at the Boao Forum for Asia he noted that credit markets were open again. Last year, Fortescue was in talks with several Chinese groups, including the $200bn sovereign wealth fund China Investment Corporation and a number of state-owned banks.