South Korean steel giant Posco has sold its 15.2 per cent stake in Sandfire Resources for $129 million.
South Korean steel giant Posco has sold its 15.2 per cent stake in Sandfire Resources for $129 million.
The sell-off represents a healthy profit for Posco, which bought the shares for $7.2 million (40 cents per share) in 2008.
The institutional block trade completed this morning by broker Citi realised an average price of $5.43 per share.
Sandfire’s shares were down 4.4 per cent at 11.30 WST today to $5.42.
Its shares have traded between $5.19 and $5.67 in the past week.
As recently as November last year, Sandfire managing director Karl Simich told Business News that rumours of a possible sell-off by Posco, when Sandfire's shares were $4.79 per share, were "mischievious".
At the time Mr Simich said Posco would not sell at those levels, or without consulting Sandfire.
As of today the strategic alliance between the two companies, which included off-take rights and board representation, is over and Posco representative Soocheol Shin has resigned from the board.
Mr Simich thanked Posco for its support over the past year and said Posco had made a tremendous return on its investment in the copper miner.
“Posco’s original investment funded the DeGrussa copper discovery in 2009, which allowed Sandfire to transform from a junior explorer to a successful, profitable and growing mining company,” Mr Simich said in a statement.
“In the process, Posco has made a tremendous return on their investment and helped us create the outstanding growth platform that Sandfire now represents.”
A month ago, Sandfire’s other major shareholder, OZ Minerals, sold its 19.1 per cent stake for $4.21 per share, or a 1.75 per cent discount to the last market price prior to Sandfire being placed in a trading halt.
OZ Minerals exit after five years of being on the register, for which it received $125 million, was part of a larger strategic review of its operations.
