Australia's Felix recommends A$2.8b Chinese offer
Friday, 14 August 2009
SYDNEY, Aug 13 (AFP): Australian miner Felix Resources Thursday urged investors to accept a record 3.3 billion dollar (US$2.80 billion) takeover by China's Yanzhou Coal.
The offer, after 12 months of talks, reaffirms Chinese interest in Australia's giant resources sector following June's snubbed cash injection for mining giant Rio Tinto, analysts said.
The Australian firm said its board of directors unanimously recommended the 16.95 dollars per share deal, saying it was a low-risk strategy for embarking on its next phase of growth.
With three of Felix's directors, including chairman Travers Duncan, holding almost 50 percent of the stock, the deal appears all but settled for Yanzhou, China's fourth-largest coal miner.
"Given Yanzhou's global expertise in coal mining we believe that Yanzhou is well positioned to continue Felix's development to the benefit of all stakeholders," said Duncan in a statement to the market late Thursday.
"Felix will continue to be headquartered in Australia and will continue to generate substantial economic benefits for the economy for many years to come," he added.
Once given the green light by shareholders the deal -- which would be the largest takeover of an Australian company by a Chinese state-run firm -- will still be subject to regulatory approvals by Canberra and Beijing, Felix said.
Felix said Yanzhou, which is listed in Hong Kong, New York and Shanghai, would finance the acquisition with 1.8 billion Australian dollars in cash, and access to "significant capital from Chinese institutions."
The offer, after 12 months of talks, reaffirms Chinese interest in Australia's giant resources sector following June's snubbed cash injection for mining giant Rio Tinto, analysts said.
The Australian firm said its board of directors unanimously recommended the 16.95 dollars per share deal, saying it was a low-risk strategy for embarking on its next phase of growth.
With three of Felix's directors, including chairman Travers Duncan, holding almost 50 percent of the stock, the deal appears all but settled for Yanzhou, China's fourth-largest coal miner.
"Given Yanzhou's global expertise in coal mining we believe that Yanzhou is well positioned to continue Felix's development to the benefit of all stakeholders," said Duncan in a statement to the market late Thursday.
"Felix will continue to be headquartered in Australia and will continue to generate substantial economic benefits for the economy for many years to come," he added.
Once given the green light by shareholders the deal -- which would be the largest takeover of an Australian company by a Chinese state-run firm -- will still be subject to regulatory approvals by Canberra and Beijing, Felix said.
Felix said Yanzhou, which is listed in Hong Kong, New York and Shanghai, would finance the acquisition with 1.8 billion Australian dollars in cash, and access to "significant capital from Chinese institutions."