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Chinese PE firm Cathay Fortune to buy copper miner Discovery Metals for $850 mn news
05 October 2012

Chinese private equity firm Cathay Fortune Corporation founded and controlled by billionaire Yu Yong and China-Africa Development Fund, has offered to buy Australia-listed but Botswana-focussed copper explorer Discovery Metals Ltd for around $850 million.

Shanghai-based Cathay, which already holds 13.7 per cent in Discovery, offered to pay A$1.70 per share in cash for the remaining shares, a premium of 17 per cent to yesterday A$1.46 closing price of Discovery, and 51 per cent over the volume-weighted average price for the previous 30 days.

Post deal, Cathay will hold 75 per cent of Discovery and China-Africa Development Fund backed by state-owned China Development Bank will hold the remaining 25 per cent.

Surprisingly Discovery informed the stock market today although it had received the takeover offer almost two weeks ago on 21 September,  by which time, the company's stock has risen by more than 24 per cent, before today's trading halt.

The consortium has secured a $600 million loan to fund the cash deal from China Development Bank, Cathay said in a statement.

Cathay also said that the transaction has already been approved by Australia's Foreign Investment Review Board, but is still conditional on securing regulatory approvals in China.





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Chinese PE firm Cathay Fortune to buy copper miner Discovery Metals for $850 mn