Publications
Partners
Johannesburg - Exxaro Resources [JSE:EXX] made a bid worth
up to A$338m ($349m) on Wednesday for African Iron, chasing the
Australian-listed company’s Mayoko iron ore project in the Republic of Congo.
The offer of up to A$0.57 a share sent African Iron’s shares
up 35% to A$0.54, indicating investors expect the deal to go through.
Exxaro has lined up a 19.99% stake from African Iron’s top
shareholder, Cape Lambert Resources, which owns a further 5.26% stake.
Key to the outcome will be African Iron’s other big
shareholder, Equatorial Resources, which owns the neighbouring
Mayoko-Moussondji project.
Equatorial, which bought a 19.99% stake in African Iron last
year at A$0.30, did not say on Wednesday whether it would accept the offer, but
said it welcomes Exxaro’s interest in Equinox.
"Exxaro’s announced takeover offer for African Iron confirms
the significant exploration and development potential of iron projects in the
Mayoko region and highlights the advantages of the investment friendly
jurisdiction of the ROC," Equatorial said in a statement to the Australian
stock exchange.
Exxaro has already received the nod from Australia’s
Foreign Investment Review Board, as well as South African approvals.
Cape Lambert’s shares rose 1.9% to A$0.535 and Equatorial’s
shares rose 4.2% to A$2.00, outpacing a 1% gain in the broader market.
Exxaro is being advised by Investec and law firm Gilbert+Tobin. African Iron’s legal adviser is Freehills.
