19/12/2007 - 22:00

Herald becomes takeover target

19/12/2007 - 22:00

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Base metals miner Herald Resources this month became the latest of many Western Australian mining companies to be the target of a takeover offer, as big international groups seek to secure access to resources.

Base metals miner Herald Resources this month became the latest of many Western Australian mining companies to be the target of a takeover offer, as big international groups seek to secure access to resources.

Indonesian mining company PT Bumi Resources has announced plans to make a $455 million cash takeover offer for West Perth-based Herald, which is seeking to develop a zinc/lead project in Sumatra.

Another Perth-based base metals miner, Perilya Ltd, recently snapped up an 8.86 per cent shareholding in Herald but has been quiet on its plans.

Other mining companies the subject of takeover offers include nickel miner Jubilee Mines NL, which was targeted by Swiss group Xstrata in a $3.1 billion offer.

There has also been plenty of action in the iron ore sector, with Murchison Metals and China’s Sinosteel competing to win control of Midwest Corporation.

George Jones’ chaired iron ore developers Gindalbie Metals and Sundance Resources announced plans for a merger but quickly pulled the pin when shareholders baulked at the idea.

The long-running saga surrounding Consolidated Minerals is close to and end, after Ukrainian group Palmary trumped rival offers from Brian Gilbertson’s Pallinghurst Resources.

Bumi said its offer for Herald represented a big premium over Herald’s prevailing share price.

“The offer provides Herald shareholders with an opportunity to realise full value for their investments as cash while eliminating commodity price uncertainties and the risks of further delays, cost overruns and funding demands of the Dairi project,” Bumi chairman Ari Hudaya said.

But Herald has advised shareholders to take no action in relation to the bid until the Herald board had considered the offer and made a formal recommendation.

Herald chairman Terry Allen told the company’s annual meeting last month that Herald had already spent $50 million on the project but was still awaiting final approvals.

“There is no doubt that the past 12 months has been a frustrating one for both shareholders and staff due to the lack of Indonesian forestry approval to allow our high-grade Dairi project to proceed to full development,” Mr Allen told the meeting.

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