Todd launches takeover bid for Rutila

Private New Zealand company Todd Corporation has launched a takeover bid for Pilbara infrastructure developer Rutila Resources, following news yesterday that it has struck a deal to buy an associated iron ore mine from Flinders Mines.

See yesterday's coverage on Todd's intention to buy Flinders Mines' Pilbara iron ore project.

New Zealand-based Todd, which is a majority stakeholder in Rutila, is offering Rutila’s minority shareholders 30 cents cash for every share it doesn’t own in the business (53.9 per cent of the company’s issued capital), which represents a 100 per cent premium to Rutila’s last closing price.

The deal values the company at about $36.4 million.

Rutila director Emmanuel Correia has recommended shareholders accept the offer in the absence of a superior proposal.

Rutila and Todd have been jointly developing plans for the Balla Balla project, which involves construction of a new railway and transhipment port, with Flinders Mines’ Pilbara iron ore project earmarked as the foundation customer.

“The Balla Balla project will require about $2 billion of capital (Rutila share about $1.4 billion) to reach production and it will be very difficult for Rutila to refinance our existing debt and obtain that capital in the current environment,” Mr Correia said.

Todd has also entered into a co-operation agreement with Nyco, which holds 23.3 per cent of Rutila’s shares.

As part of the co-operation agreement, Nyco will remain an investor in Rutila and will not commit its shares to the offer.

Rutila shares closed 86.6 per cent higher to 28 cents a share.