Flinders backs improved Todd offer

Pilbara-focused Flinders Mines has recommended its shareholders accept an improved takeover offer from private New Zealand company Todd Corporation that values the target at about $74 million.

Todd Corporation nearly doubled its all-cash offer for Flinders to 2.5 cents a share, representing a 233 per cent premium to Flinders’ 30-day volume-weighted average price.

Todd has being trying to gain ownership of Flinders’ Pilbara iron ore since May last year, when it put forward a $65 million offer to buy the project.

It also made an offer to wholly acquire the company for 1.3 cents a share in March, but Flinders shareholders were advised to take no action.

Todd is a 20.5 per cent stakeholder in Flinders.

Its move on Flinders comes after Todd gained control last year of Rutila Resources, which developed plans (now on hold) to build the Balla Balla transhipment port in the Pilbara; Flinders was earmarked as the foundation customer of the port. 

“Todd and Flinders have also entered into a bid implementation agreement, under  which the directors of Flinders have agreed to unanimously recommend that Flinders shareholders accept the improved offer, in the absence of a superior proposal,” Todd said in a statement.

“The Flinders directors have also announced that they intend to accept, or procure the acceptance of, the improve offer in respect of any Flinders shares that they own or control, in the absence of a superior proposal.”

The news today sent Flinders shares surging 66.6 per cent to 2.5 cents each by the close of trade.

Todd said it had also been advised by Flinders that the target’s discussions with third parties in relation to the development of the Pilbara project had failed to generate firm commitments or proposals.

“Flinders has also confirmed that its board is of the opinion that the certainty of the Todd offer represents a more attractive proposition than the uncertain future outcomes associated with these incomplete discussions,” Todd said.

“The Flinders board has agreed to cease any existing discussions and to not solicit competing proposals from third parties for Flinders and the PIOP while Todd’s takeover bid remains open.”