Sundance terminates deal with Hanlong
Source: Bloomberg News |
April 9, 2013, Tuesday
|
Print Edition
Print Edition
SUNDANCE Resources Ltd has terminated an agreement with Sichuan Hanlong Group after the Chinese company failed to secure funding for its A$1.14 billion (US$1.18 billion) bid to buy the rest of the Australian company.
Hanlong was also unlikely to meet other required conditions, Perth-based Sundance said in a statement yesterday. The company is in talks with other parties about their interest in the Mbalam-Nabeba iron ore project, Sundance said, without naming them.
The collapse of the deal, first agreed in October 2011, comes after Hanlong's billionaire Chairman Liu Han, 47, was reported to have been detained last month by police in China. Buying Sundance would have given the Chinese firm control of the US$4.7 billion Mbalam iron ore project that straddles the Republic of Congo and Cameroon.
"It's going to take a while for the dust to settle in terms of what are the additional potential bidders out there," said Matt Fernley, an analyst at GMP Securities Ltd in London. "For certain, the stock is going to be under pressure."
Shares of Sundance last traded on March 19 at 21 Australian cents, 53 percent lower than Hanlong's revised offer of 45 cents a share, indicating some investors didn't expect the deal to succeed. The shares will resume trading today, Sundance said.
"The board of Sundance believes it is in its shareholders' best interests to terminate the agreement," Chairman George Jones said in the statement. "Sundance's Mbalam-Nabeba project is significantly more valuable today than when the Hanlong bid was first made."
The firm is in talks with other Chinese and non-Chinese parties, Sundance said.
Liu is being held for helping his brother Liu Yong evade capture over a 2009 triple murder, state media said last month. Liu and his ex-wife were detained in Beijing at the end of the annual meeting of China's legislature, said a March 20 report in Shanghai Securities News that cited unidentified people familiar with the matter.
Hanlong was also unlikely to meet other required conditions, Perth-based Sundance said in a statement yesterday. The company is in talks with other parties about their interest in the Mbalam-Nabeba iron ore project, Sundance said, without naming them.
The collapse of the deal, first agreed in October 2011, comes after Hanlong's billionaire Chairman Liu Han, 47, was reported to have been detained last month by police in China. Buying Sundance would have given the Chinese firm control of the US$4.7 billion Mbalam iron ore project that straddles the Republic of Congo and Cameroon.
"It's going to take a while for the dust to settle in terms of what are the additional potential bidders out there," said Matt Fernley, an analyst at GMP Securities Ltd in London. "For certain, the stock is going to be under pressure."
Shares of Sundance last traded on March 19 at 21 Australian cents, 53 percent lower than Hanlong's revised offer of 45 cents a share, indicating some investors didn't expect the deal to succeed. The shares will resume trading today, Sundance said.
"The board of Sundance believes it is in its shareholders' best interests to terminate the agreement," Chairman George Jones said in the statement. "Sundance's Mbalam-Nabeba project is significantly more valuable today than when the Hanlong bid was first made."
The firm is in talks with other Chinese and non-Chinese parties, Sundance said.
Liu is being held for helping his brother Liu Yong evade capture over a 2009 triple murder, state media said last month. Liu and his ex-wife were detained in Beijing at the end of the annual meeting of China's legislature, said a March 20 report in Shanghai Securities News that cited unidentified people familiar with the matter.
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