Lun 11 Avr 2011 16:27
Vale’s R7,5bn offer may spur Chinese bid for Metorex − analy
Vale on Friday made a R7,5-billion, or $1,1-billion, offer for the base-metals miner, offering shareholders R7,35 a share.
Cadiz analyst Peter Major told Mining Weekly Online that Metorex had been having serious negotiations with a number of interested international parties for over the past six months and the nationality that rumours kept mentioning the most was the ‘Chinese’.
“I think there is a 50/50 chance that the Chinese will put in an offer to beat Vale’s offer, and if they do they will most likely get it, because I don’t think that Vale is prepared to put in a higher bid.”
Major said the Chinese would have to offer at least R8 a share to cover the 10% break fee Metorex had agreed with Vale.
“Normally, in most buyouts near the top of the market, I would say take the money and run. But in this case I think the offer is a bit undervalued. If this current offer goes through ‘as is’, I think it is not a bad deal for Vale at all,” he said.
Metorex CEO Terence Goodlace said that if there were other “serious and firm” offers, Metorex had a duty to consider them.
He stressed that the unsolicited Vale offer was positive for Metorex shareholders. “The approach by Vale bears testimony to the successful repositioning and recapitalisation efforts undertaken by the Metorex team over the last two years and the value being generated for shareholders,” he added.
The acquisition requires the approval of at least 75% of Metorex shareholders, and Vale has already received almost 26% in irrevocable undertakings.
Metorex chairperson Rob Still and nonexecutive director Alberto Barrenechea had already committed to sell a big chunk of their shares at R7,35 each for R1,02-billion, or 13% of the company shares if the deal goes through.
“It is a good game at the moment. Still has officially committed his shares to the Vale offer, but I think that unofficially he would love for the Chinese to come in with a better price. All shareholders would.
“At this point in time nothing is certain. I am not sure what will happen first: will the Chinese come with a better price, or will some of the larger shareholders reject the offer,” said Major.
The miner has two operating mines including the Chibuluma mine in Zambia, in which it holds an 85% interest, and Ruashi in the Democratic Republic of Congo (DRC), in which it holds a 75% interest. It has three projects in the DRC, one in the development phase and two in the exploration phase.