(Corrects Cape Lambert’s additional stake to 5.26 pct in
paragraph three)
Jan 11 (Reuters) – South Africa’s Exxaro Resources
made a bid worth up to A$338 million ($349 million) 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 percent to A$0.54, indicating investors expect the deal to
go through.
Exxaro has lined up a 19.99 percent stake from African
Iron’s top shareholder, Cape Lambert Resources, which
owns a further 5.26 percent 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 percent 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 approval from Australia’s
Foreign Investment Review Board and South African approvals.
Cape Lambert’s shares rose 1.9 percent to A$0.535 and
Equatorial’s shares rose 4.2 percent to A$2.00 outpacing a 1
percent gain in the broader market.
Exxaro is being advised by Investec and law firm
Gilbert+Tobin. African Iron’s legal adviser is Freehills.
($1 = 0.9681 Australian dollars)
(Reporting by Sonali Paul; Editing by Lincoln Feast)
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