Xstrata to buy iron ore explorer Sphere Minerals for $383 million

Swiss diversified mining group Xstrata has proposed acquiring Sphere Minerals Limited, a West African focused iron ore exploration and development company, for A$428 million ($383 million) in cash.

Xstrata's offer is for A$2.50 per share, valuing Sphere at approximately A$428 million, representing a 61-per cent premium over the closing price of A$1.55 per Sphere share on 23 August 2010 on the Australian Securities Exchange.

Xstrata said that its offer, which has been agreed by all the directors of Sphere, follows extensive consideration by the Sphere board of the strategic options for Sphere's projects, including discussions with other parties.

It said that the Sphere board concluded that Xstrata's offer represents the best opportunity for Sphere shareholders to maximise the value of their investment.

West Perth, Australia-based Sphere is a West-Africa focused iron ore company, with interests in three iron ore projects in Mauritania, West Africa:

It has 50:50 joint venture with Société Nationale Industrielle et Minière (SNIM), Mauritania's state-owned iron ore producer in the large-scale Guelb el Aouj iron ore project.