DMC Mining is poised to accept a takeover offer from China's Meijin Energy Group, which trumps Cape Lambert Resources' bid by more than $3 million.
The takeover target today said it had entered into a conditional takeover bid implementation deed with Meijin, which plans to pay 50 cents cash for each DMC share in an off-market takeover offer.
The Meijin offer, which values DMC at $43.4 million, is subject to a number of conditions including due diligence and the agreement to accept the offer by an entity associated with DMC managing director David Sumich.
Shares in DMC are currently in a trading halt and last traded at 50c.
The latest offer is four cents higher than Cape Lambert's recently sweetened bid of 46c cash for each DMC share, which values the target at close to $40 million. Cape Lambert already holds a 36.2 per cent interest in DMC.
DMC's main asset is an 80 per cent interest in the Mayoko iron ore project in the Democratic Republic of Congo.
Cape Lambert yesterday said it would turn its focus on overseas projects after it cancelled exploration work at its namesake Pilbara iron ore project on the back of the federal government's proposed super profit tax on the mining sector.
Cape Lambert holds a 100 per cent interest in the Marampa iron ore project in Sierra Leone and a gold project in Greece.
DMC's directors have today agreed to they will unanimously recommend that shareholders accept the Meijin offer, if made, in the absence of a superior proposal and subject to the proposed takeover price staying within or above the valuation range assessed by an independent expert.
DMC have hired BDO Corporate Finance to assess Meijin's offer.
The directors have also indicated they intend to accept Meijin's offer and urged shareholders to take no action on the Cape Lambert bid.
This is not the first takeover attempt Meijin have made for a WA company in the past year, with the Chinese group submitting a takeover proposal for Rocklands Richfield.