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Sundance chairman George Jones.

Sundance takeover almost dead

Hanlong's troublesome 20 month-long takeover of Sundance Resources looks to be almost dead, after the Chinese suitor disclosed it would not meet a key funding deadline for the $1.3 billion deal .

Investors have already priced in the likelihood of the deal falling over, with shares in the Africa-focused iron ore hopeful last trading at 21 cents due to Hanlong's inability to secure finance and serious leadership problems. That compares to an offer price of 45 cents per share.

Analysts believe Perth-based Sundance's major project could be sold off if the final deadline for a tie-up elapses next week.

Hanlong has told Sundance that the credit approved term sheets required to be provided under the scheme implementation agreement (SIA) as part of the takeover will not be delivered as planned by the close of business on Tuesday.

"In light of this advice from Hanlong, Sundance and Hanlong are required to enter into a five business day good faith consultation period under the SIA," Sundance said.

"If the parties fail to reach agreement during that period, either party may then terminate the SIA."

CMC Markets chief executive Michael McCarthy said the market was widely expecting the deal to fall over.

"Hanlong is going to be forced to step away because of factors that are beyond their control such as an inability to get finance and some concerns about the leadership of the company in China," he said.

"What we're likely to see after this five-day meeting is a mutual statement that they've agreed to go their separate ways."

He said it was extremely unlikely that Hanlong would be able to secure finance within five days, meaning Sundance's prospects could be later broken up and sold.

This scenario would be more likely than Sundance finding an on-market partner, he said.

Hanlong Group's proposed takeover of Sundance has dragged on for 20 months due to regulatory delays and Hanlong's inability to secure finance.

Last week, Sundance said it was still in talks with Hanlong as it prepared to speak to China's National Development and Reform Commission (NDRC) about the takeover.

The company is also seeking information from Hanlong following media speculation concerning its chairman Liu Han.

Hanlong executives have faced a volley of allegations of insider trading, market manipulation and tax allegations, even as the company's overseas bankers have been talking up the company's bona fides.

Sundance plans to lift its trading halt before April 8.

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Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 31/01/18

1 year TSR5 year TSR
73rdTriangle Energy Global204%-28%
139thSundance Resources100%-53%
217thHannans50%0%
663rdRange Resources-34%-39%
709 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

07/09/17
$0 Other
07/09/17
$0 Other
07/09/17
$0 Other
Total value as at the date of the transaction
Source: Morningstar

Revenue

52nd↑Triangle Energy Global$16.8m
53rd↑Hannans$13.5m
54th↑Sundance Resources$12.4m
55th↑India Resources$11.4m
56th↓Range Resources$11.1m
498 listed resources companies ranked by revenue.
Source: Morningstar

Remuneration from Sundance Resources

142ndGiulio Casello$659k
thDavid Meehan-$194k
Ranked by total remuneration from all listed WA companies

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