SA Exxaro launches up to AUD 338mn bid for African Iron.

By bne IntelliNews January 12, 2012
South African mining group Exxaro Resources launched on Wednesday an up to AUD 338mn (EUR 273.1mn) bid for Australian-listed African Iron, aiming to expand in the iron ore sector. Exxaro is offering AUD 0.51 cash per African Iron share and AUD 0.31 cash per listed option, as the sums will be raised to AUD 0.57 and AUD 0.37, respectively, if Exxaro acquires 75% or more of the fully diluted share capital of African Iron. The deadline of the offer is set by February 14, 2012. African Irons shares shot up 35% to AUD 0.54 following the offer, indicating that investors expect the deal to go through. Exxaro believes the fundamentals of iron ore are positive in the medium- to long-term and has in-house expertise and experience in mining bulk ore commodities, the company said in a statement. African Irons key asset is its 92% interest in the Mayoko iron ore project in the Republic of Congo (RoC), which has a mineral resource of 121 million tonnes of iron ore. African Irons second iron ore opportunity is its 85% interest in the 944 sq km Ngoubou-Ngoubou Authority to Prospect, which is adjacent to Mayoko. Exxaro has been actively pursuing opportunities to increase its exposure in iron ore and believes this operation in the RoC, an iron ore development frontier, provides an attractive platform for further growth in the commodity, the company said. Exxaro said it has entered into a pre-bid acceptance agreement with African Irons largest shareholder, Cape Lambert, holding a 19.99% stake, under which Cape Lambert has agreed to accept the offer within five days of the offer opening, unless a higher bid is announced meanwhile. Exxaro Resources Limited is a diversified South African-based mining company, which extracts and processes a range of minerals and metals, including coal, mineral sands and base metals primarily in South Africa, Australia and China.

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