BC Iron backs Regent Pacific bid

Finance

Publishing Date: 21 Jan 2011 12:27pm GMT
Author: Mining Journal

Directors of Australian iron ore developer BC Iron Ltd have recommended a takeover offer from its largest shareholder, Hong Kong’s Regent Pacific Group Ltd.

Already the owner of 19.9% of BC Iron, Regent Pacific plans to buy the shares it doesn’t yet own for A$267 million (US$263 million), or A$3.30/share. This values BC Iron at about A$345 million.

Jamie Gibson, Regent Pacific chief executive, said the company “is seeking to be a long-term player in both the growth and development of BC Iron and the Australian iron ore sector”.

He added that BC Iron’s management team and all current operations will be retained, and no changes will be made to the company’s strategy.

BC Iron’s key asset is a 50% joint venture interest in the Nullagine iron ore project with Fortescue Metals Group Ltd in the Pilbara of Western Australia. The company commenced shipments from the mine earlier this month and expecting to export 1Mt by mid-year.

Mike Young, BC Iron managing director, said: “The offer from regent Pacific is an all-time high price for our company. BC Iron shareholders will benefit from having the opportunity to crystallise immediate value now with the certainty of cash.”