Metals X looks set to succeed in its long-running battle for control of Aditya Birla Minerals, with the takeover target recommending shareholders accept an increased offer that values the company at about $103 million.
Metals X looks set to succeed in its long-running battle for control of Aditya Birla Minerals, with the takeover target recommending shareholders accept an increased offer that values the company at about $103 million.
West Perth-based Metals X has proposed to increase its offer to one of its shares for every 4.5 Aditya Birla shares (up from one for every five) plus an additional 8 cents in cash per share, valuing the copper miner at 32.9 cents a share.
Metals X plans to support the cash component of the offer with a $25 million loan facility it has in place with Citibank.
The offer was a game-changer for Aditya Birla’s largest shareholder, Indian company Hindalco Industries, which has signalled its intention to accept the increased offer within the week.
“Hindalco’s intention is subject only to receipt of required regulatory approval from the Reserve Bank of India and no superior proposal materialising in the next five business days,” Metals X said in a statement.
The proposed increased offer will only be made official if the RNI gives its approval of the offer, and no superior proposal is made within the next five business days.
Aditya Birla has also recommended its shareholders accept the offer, and has signed an implementation agreement for the change in control of the company.
Metals X already holds a 29.7 per cent stake in Aditya Birla; that would increase to 80.7 per cent when Hindalco accepts the offer.
Aditya Birla managing director Neela Patnaik said the company undertook a strategic review process over the past six months to assess all available alternatives.
“The review enabled a robust price discovery process to be undertaken by Aditya Birla,” he said.
“Having now concluded the strategic review process, the board believes that the increased offer, if it becomes available, would represent a superior, certain and fair outcome for shareholders.”
The closing date of the offer (this Thursday) has also been extended to the end of July.
Metals X first put forward a $68 million bid for Aditya Birla in October last year, however it was quickly rejected by Hindalco.
The offer was extended several times with Metals X slowly increasing its stake in Aditya Birla through acceptances by the target’s shareholders.
Metals X is seeking to gain control of Aditya Birla’s core asset – its Nifty copper mine in the Great Sandy Desert – as part of its goal to diversify its portfolio of mining assets, specifically gold, nickel, tin and copper operations.
Metals X shares were 5.3 per cent lower to $1.06 each, while Aditya Birla shares surged 18 per cent to 29.5 cents each at 10:30am.
