Sundance accepts lower price
By Richard Fu |
August 28, 2012, Tuesday
|
Print Edition
Print Edition
AUSTRALIAN miner Sundance Resources Ltd has accepted a reduced takeover offer from China's Hanlong Group amid weak iron ore prices, paving the way for the deal to conclude after lengthy delays.
A slowdown in the global economy and weak demand from China for the steelmaking ingredient prompted the Sichuan Province-based investment group to renegotiate.
The new offer of 45 Australian cents per share, 21 percent lower than its earlier bid of 57 cents, would value Sundance at A$1.37 billion (US$1.42 billion). Hanlong already owns 17 percent of Sundance.
Sundance Chairman George Jones said the board had decided to accept the lower offer following extensive talks with Hanlong and after considering several factors, including sluggish financial markets since the original deal was struck in October.
"The board believes that the revised offer is worthy of putting to shareholders in light of several key considerations," Jones said in a statement.
Hanlong's discounted offer is still 34 percent higher than Sundance's last price on July 31 pending yesterday's announcement. Sundance rose 13 percent yesterday as trading resumed in Sydney.
Sundance said the deal may close by mid-December.
Hanlong earlier said it got approval from the National Development and Reform Commission to buy Sundance. The nod was conditional on the price being "reasonable" and Sundance gaining approval for its project in west Africa.
A slowdown in the global economy and weak demand from China for the steelmaking ingredient prompted the Sichuan Province-based investment group to renegotiate.
The new offer of 45 Australian cents per share, 21 percent lower than its earlier bid of 57 cents, would value Sundance at A$1.37 billion (US$1.42 billion). Hanlong already owns 17 percent of Sundance.
Sundance Chairman George Jones said the board had decided to accept the lower offer following extensive talks with Hanlong and after considering several factors, including sluggish financial markets since the original deal was struck in October.
"The board believes that the revised offer is worthy of putting to shareholders in light of several key considerations," Jones said in a statement.
Hanlong's discounted offer is still 34 percent higher than Sundance's last price on July 31 pending yesterday's announcement. Sundance rose 13 percent yesterday as trading resumed in Sydney.
Sundance said the deal may close by mid-December.
Hanlong earlier said it got approval from the National Development and Reform Commission to buy Sundance. The nod was conditional on the price being "reasonable" and Sundance gaining approval for its project in west Africa.
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