Australia's Sundance Resources expects Hanlong's offer to be lowered
01 August 2012
Australian iron ore miner, Sundance Resources is poised to reveal that the Chinese regulator has provisionally approved Hanlong Mining's proposed A$1.7 billion ($1.79 billion) takeover offer, and the Chinese miner will return with a amended lower offer, the Deal Journal Australia reported, citing a person familiar with the matter.
Sundance had yesterday requested for a trading halt (See: Sundance Resources in trading halt ahead of Chinese regulatory approval) and was expected to make an announcement today ahead of the Chinese regulator's decision on the deal, but the Perth-based company remained tight-lipped on China's National Development and Reform Commission's (NDRC) decision.
Although Hanlong Mining is a privately-held company, the deal still requires the approval from the NDRC before it can close the transaction. The Australian regulator, The Foreign Investment Review Board, had already approved the deal in late June.
The Deal Journal said that the board of Sundance is likely to recommend a 12 per cent lower offer from Hanlong Mining due to a change in market conditions.
In July last year, Hanlong, with an 18.6-per cent stake in Sundance, had offered to buy the remaining shares it does not already own in the Australian miner for A$0.57 a share or A$1.7 billion, a 25-per cent premium to Sundance's closing price of A$0.40 on 16 July.
Last year Hanlong acquired the stake from the estate of the late Australian mining mogul Ken Talbot at A$0.44 a share, a year after his death in a plane crash in Africa.