Australia's Indophil rejects Xstrata's $399 million offer

Australian mining company Indophil Resources NL has rejected an A$426 million ($399 million) takeover offer by Xstrata, the world's fourth largest copper producer.

Swiss-based Xstrata offered $1 cash for every Indophil share to buy out its partner in the Tampakan copper and gold project, which is said to be Southeast Asia's largest undeveloped copper and gold project.

The offer price is at a 28 per cent premium to Indophil's A$0.78 closing price on Wednesday.

Indophil holds a 34.23 per cent interest in the Tampakan copper and gold project located on the Philippine island of Mindanao, about 65 km north of General Santos City.

Tampakan has the largest undeveloped copper deposit in South-East Asia, with 12.8 million tonnes of copper and 15.2 million ounces of gold. Xstrata is the the operator and major stakeholder in the project.

The Swiss miner has already bought a 17.8 per cent stake from Indolphil's largest shareholder, Lion Selection Ltd, which in turn is fighting a hostile bid from Indophil. Xstrata has also entered into a pre-bid acceptance agreement with Lion Selection.