just in..Russian steel producer buys Mt Gibson...

just in..

Russian steel producer buys Mt Gibson stake
13-November-06 by Mark Beyer

Mt Gibson Iron's hostile takeover offer for Aztec Resources has taken a surprise turn with Cambrian Mining selling its 19.9 per cent Mt Gibson stake to a large Russian iron ore and steel producer.
Cambrian announced today it has entered into an agreement to sell its stake for gross proceeds of $98.8 million, but did not name the purchaser.
Cambrian was previously a 30 per cent shareholder in Aztec and acquired the stake in Mt Gibson when by accepting the scrip takeover offer.
Mt Gibson managing director Luke Tonkin said he was not able to name the purchaser of the Cambrian stake but disclosed it was a "very significant" iron ore and steel player in Russia.
"I have spoken to them and they have indicated they are extremely supportive of the company and its management," Mr Tonkin told WA Business News.
The Russian investment adds a new dimension to the iron ore industry, which has attracted large investments from Japanese, Korean and more recently Chinese companies.
The latter group includes Hong Kong investor Shanghai Merchants Holdings, which has tried to set itself up as a kingmaker in the takeover battle by acquiring an 8.8 per cent stake in Mt Gibson and a 7.3 per cent stake in Aztec.
Shanghai director Michael Bogue last week labeled the takeover offer a failure at current levels, with Mt Gibson holding 40 per cent of its target.
Mr Bogue also called on Mt Gibson to take the initiative to reach a 100 per cent shareholding.
Mr Tonkin reacted strongly to the criticism.
"I find his comments staggering," Mr Tonkin said.
"I've got to query the logic of the comments made by Mr Bogue."
He said Mt Gibson was aiming to get control of Aztec and would gain little advantage from acquiring 100 per cent of the target, since Aztec would be burning cash for the next three years.
Commenting on the claims of bickering and mud-slinging between the two companies, Mr Tonkin said Mt Gibson's initial offer was cordial and since then it was simply addressing issues raised by Aztec.