Xstrata drops conditions to expedite Sphere takeover

Finance

Publishing Date: 27 Oct 2010 9:56am GMT
Author: Mining Journal

Xstrata plc has declared its US$383 million offer for Sphere Minerals Ltd unconditional in an attempt to expedite the takeover process.

The announcement comes after the company had only received acceptances representing 8.2% of the shares in issue, and Singapore’s Sin-Tang (with a holding of almost 8.5%) said it would not accept the A$2.50/share cash offer, and was looking at boosting its own stake.

For the deal to be successful, Xstrata will need to have received acceptances from over 50% of the company’s shares by November 12.

Peter Freyberg, chief executive of Xstrata Coal said: “The Sphere directors unanimously recommended that, in the absence of a superior proposal, Sphere shareholders should accept Xstrata’s takeover offer. Xstrata’s proposal remains the only offer on the table for Sphere’s shareholders.”

Sin-Tang says it is leading a Chinese consortium to increase its shareholding in Sphere. It also claimed that certain shareholders that have accepted the Xstrata offer are beginning to withdraw.

Sphere has three iron-ore assets in Mauritania; namely the Guelb el Aouj joint venture with Mauritania’s state-owned producer, and the Askaf and Lebtheinia projects.