OM Holdings says it will run the ruler over Consolidated Minerals' Woodie Woodie manganese mine in the Pilbara, which could unlock synergies between both companies.
OM Holdings says it will run the ruler over Consolidated Minerals' Woodie Woodie manganese mine in the Pilbara, which could unlock synergies between both companies.
In a statement today, OMH said it had executed a confidentiality agreement with ConsMin, which holds an 11.7 per cent interest in the Singapore-headquartered company.
"ConsMin and OMH are investigating a possible acquisition of an interest in Woodie Woodie by OMH to effect a business combination involving the companies' respective Australian manganese operations and to determine whether any potential strategic, operating and/or marketing synergies could be achieved as a result of such a transaction, which could create the world's second largest low phosphorous siliceous high grade manganese ore producer," OMH said.
OMH added that it would soon start due diligence on the possible Woodie Woodie transaction, which could then lead to more detailed investigations, conditional on negotiated valuations and structuring of the transaction, whether it be in the form of equity, cash or debt, or a combination.
"OMH expects to commence the initial phase of the DDI process on Woodie Woodie as soon as is practical and will keep the market informed with regards to any material developments should they arise," the company said.
ConsMin acquired an initial 10 per cent interest, through subsidiary Stratford Sun, in OMH late in 2008, which prompted OMH to seek takeover protection measures.
ConsMin had said at the time that it did not intend to lift its stake in OMH to above 12 per cent.
In early 2009, OMH shareholders overwhelmingly voted for the protection measures, with Stratford Sun almost entirely accounting for votes cast against the resolution.
ConsMin then sought to nominate a director to OMH's board in May, however the resolution was overwhelmingly defeated at the OMH's annual general meeting later that month.
Both companies have manganese operations in Australia, with ConsMin, controlled by Ukranian billionaire Gennadiy Bogolyubov's Palmary Enterprise, operating Woodie Woodie and OMH running the Bootu Creek operation in the Northern Territory.
Manganese has been in high demand with the commodity used as a steel making input.
Shares in OMH closed up one cent to $2.02 today.
