Indophil shares leap as mine deal struck
The Age
Wednesday December 2, 2009
XSTRATA has given China's Zijin Mining a flying start to its $1.28-a-share takeover bid for Melbourne-based Indophil, Xstrata's partner in the world-class Tampakan copper/gold deposit on the southern island of Mindanao in the Philippines.Zijin has secured a pre-bid acceptance agreement with Xstrata covering 19.9 per cent of Indophil €” a legacy of Xstrata's failed takeover bid for Indophil at the same price level last year.The bid from Zijin has been recommended by the Indophil board.The bid price represents an 18 per cent premium to Indophil's last sale price and an 83 per cent premium to its six-month average.Zijin is China's biggest gold producer and its third-biggest copper producer.Indophil chief executive Richard Laufmann slipped back into Melbourne yesterday from China where he has been working on the deal.It is expected that both the bidder's statement and the target's statement will be available before Christmas, signalling the speed and support of the process.The shares jumped more than 10 per cent on the news to finish up 11.5 to $1.20.The offer values Indophil at $545 million on a fully diluted basis, the mid-range of expectations from the formal sales process initiated by the company. That lengthy process and the rebound in copper prices since mid-February has seen Indophil shares surge from a year-low of 31 a share.Xstrata owns 62.5 per cent of Tampakan and Indophil 34.23 per cent, with an agreement to acquire the remainder from local interests.
© 2009 The Age