South Africa-based mining company Exxaro Resources Limited (Exxaro) and Australia-listed iron ore exploration and development company African Iron Limited (African Iron) have announced that they have entered into a takeover bid implementation agreement for a cash takeover by Exxaro of all the shares in African Iron.
Exxaro offers A$0.51 cash per each African Iron share, adding that it will increase the offer to A$0.57 per share if it has a relevant interest in 75 percent or more of African Iron shares. The offer amounts to A$338 million at the base price of A$0.57.
While the African Iron board unanimously recommends that shareholders accept the takeover offer, in the absence of a superior proposal, the largest shareholder Cape Lambert which owns 25.25 percent in African Iron also supports the offer.
Exxaro stated that it has obtained approval from Australia's Foreign Investment Review Board and all necessary South African regulatory approvals for the takeover and that it will fund the takeover from cash reserves and existing debt facilities.