19/05/2008 - 13:22

Albidon now a takeover target

19/05/2008 - 13:22

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Perth-based nickel miner Albidon Ltd could be in play as a takeover target after its major shareholder revealed plans to sell its blocking stake worth some $37 million.

Perth-based nickel miner Albidon Ltd could be in play as a takeover target after its major shareholder revealed plans to sell its blocking stake worth some $37 million.

Resource investment house Lion Selection Ltd unveiled plans today that could see it net nearly $200 million in cash following recent agreements with Perth-based Beadell Resources and Xstrata.

Last week the company said it planned to sell its 30 per cent interest in the Cracow gold mine to Beadell for $80 million for cash and scrip.

It also entered into a pre-bid agreement with Xstrata - which recently launched a takeover bid for Indophil Resources NL - for the sale of 17.8 per cent of its holding in Indophil, if the latter's takeover attempt of Lion does not succeed.

Lion currently holds a 25.4 per cent stake in Indophil.

The investment firm said the two agreements, should they go ahead, would generate cash in excess of $162 million.

Additionally, Lion said it will generate additional proceeds from the sale by the African Lions funds of their 20.5 per cent interest in Albidon. It is not known if African Lion plans to sell its entire Albidon stake altogether or in smaller parcels.

Lion, which owns 27.5 per cent of the African Lion funds, said its indirect interest in Albidon is worth $37 million based on the latter's closing price on Friday of $3.94.

Shares in Albidon gained 23 cents, closing at $4.17 this afternoon with a market capitalisation of $702 million.

Albidon's flagship asset is the Munali nickel project in Zambia which is due to start production shortly and aims ramp up production to around 10,000 tonnes of nickel from 2010.

Speculation over Albidon as a takeover target has been mounting over the past few months following an announcement that stopped short of confirming or denying rumours that African Lion could sell its stake, and the appointment of the Royal Bank of Canada as its corporate advisor.

 

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