BHP Billiton to acquire iron ore miner UMC for A$204 million
16 October 2009
BHP Billiton is acquiring iron ore miner United Minerals Corporation for A$204 million ($188 million), thwarting a Chinese bid of A$27.2 million for an 11.4-per cent stake in the company.
The Melbourne, Australia-based miner today said that it will acquire all the outstanding shares in UMC for A$1.30 per share in cash through its wholly-owned subsidiary BHP Billiton Minerals Pty Ltd.
The bid however is conditional on UMC abandoning a planned deal with China Railway Materials Commercial Corp, which had offered to acquire the 11.4-per cent stake in for A$1.35 a share, or for A$27.2 million.
BHP said that the transaction is to be voted on by UMC shareholders and the UMC board intends to unanimously recommend the offer, in the absence of a superior proposal and subject to an independent expert dropping the bid for not neing in the best interests of UMC shareholders.
BHP also said that in the absence of a competing proposal, the A$1.30 offer is final and will not be increased.
BHP Billiton had entered into confidential discussions with UMC in early 2009 about a possible merger and completed a technical due diligence review of UMC's assets. But both companies failed to reach an agreement on the value at that time