Resources giant BHP Billiton has increased pressure on WMC Resources shareholders to accept its $9.2 billion bid, after revealing it had only received 4.49 per cent of its target’s shares.
BHP said it would not be adding a sweetener to the offer which expires on June 3, as many in the market had expected.
“It is not in the interests of BHP Billiton or WMC share-holders to further extend the offer. Should the offer lapse, we will continue to follow our clearly set out strategy focussing on value creating opportunities,” BHP chief executive Chip Goodyear said.
Should BHP increase its holding to more than 50 per cent within the last seven days of the offer period, it will be automatically extended by 14 days.
Adding more weight to their takeover attempts, BHP has also been granted approval by the Australian Securities and Investments Commission to combine acceptances received through its acceptance facility organised by Merrill Lynch Equities (Australia) as well as the number of WMC shares in which BHP and its associates has a relevant interest, in order to reach the 50 per cent holding.
The approval enables BHP to include provisional acceptances by institutional shareholders that indicate their intention to accept but aren’t allowed to until BHP reaches 50 per cent.
BHP shares fell 7 cents to $7.83 following news of the ultimatum.
In response, WMC issued a statement in which the board of directors reaffirmed its support for the offer.
That statement repeated to shareholders that the offer was at the upper end of the value spectrum provided by the independent valuer, and represented an 85 cent premium to Xstrata’s offer for the company.
According to the statement, the directors themselves have decided to accept the offer in the absence of a superior proposal.
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