Cardinal bidder gets FIRB approval

Shandong Gold has received federal government approval to proceed with its takeover of Perth-based Cardinal Resources, despite increasing sensitivity around Chinese foreign investment.

It comes about three weeks after Cardinal's board recommended shareholders accept the offer from Shandong Gold, ahead of a competing bid from Russian-owned Nordgold. 

Shandong, which is dual-listed on the Shanghai and Hong Kong stock exchanges, aims to purchase Cardinal for 70 cents per share – a deal that values the company at around $395 million.

Cardinal told the market this morning that the Foreign Investment Review Board had approved the off-market takeover, with the transaction only subject to other conditions including a 50.1 per cent acceptance by Cardinal shareholders.

Cardinal, which is developing the 5.1 million ounce Namdini gold project in West Africa, said in its target statement released earlier this month that the company did not have the substantial capital required to bring the Namdini project into production.

Pre-production capital for Namdini is estimated to be $US390 million (about $A543 million).

Today’s announcement comes as Treasurer Josh Frydenberg reportedly had delayed a decison on China Mengnui Dairy Company’s proposed $600 million acquisition of Sydney-based Lion Dairy & Drinks.

It comes despite the deal already being approved by the competition regulator in February and Mengnui already owning Bellamy’s Australia – an organic infant formula company based in Tasmania.

The FIRB has rejected several resources deals this year including a $20 million placement to a Chinese state-owned steelmaker by rare earths company Northern Minerals and a $14.1 million placement to lithium company Yibin Tianyi by AVZ Minerals.