19/08/2011 - 14:41

China's Northwest bids $68m for Meridian

19/08/2011 - 14:41

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China's Northwest bids $68m for Meridian

Meridian Minerals has announced its largest shareholder, China’s Northwest Nonferrous International Investment, will acquire the remaining Meridian shares it does not already own, in a deal worth $68 million.

Meridian and Northwest have signed a binding heads of agreement for Northwest to acquire Meridian’s shares for 14 cents per share, a 22 per cent premium to yesterday’s closing price.

Northwest has also agreed to provide Meridian with $5 million short term cash funding by August 31.

Meridian’s impending rights issue will be withdrawn once the funding is received.

The acquisition remains subject to Foreign Investment Review Board and Chinese regulatory approvals.

Meridian managing director Jeremy Read said the company looked forward to agreeing to the transaction documentation with Northwest in coming weeks.

“A little over two years ago Meridian’s share price was trading at $0.02 with a market capitalisation of $1.5 million,” Mr Read said.

“Therefore the board believes that the agreement we have reached with Northwest will allow all Meridian shareholders to capture the significant share price appreciation we have seen over the past two years.”

Ernst & Young will work as Meridian’s lead corporate advisor, with Hynes Lawyers as legal counsel.

Northwest is being advised by Blake Dawson.

At close of trade today Meridian’s stock had gained 13 per cent, to trade at 13 cents.

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