Xstrata Queensland Limited a wholly owned subsidiary of Xstrata plc announced its intention to make an all cash offer to acquire all of the issued and outstanding shares in Indophil Resources NL for AUD 1.00 per share, valuing Indophil’s issued and to be issued share capital at approximately AUD 426 million.
Xstrata’s cash offer is priced at a 28% premium to the closing price of AUD 0.78 per Indophil share on the Australian Securities Exchange on May 14th 2008 and a 29% premium to the volume weighted average price of Indophil shares over the last month on the ASX. The Offer will be financed through Xstrata’s existing credit facilities and cash on hand.
Highlights
1. Cash offer of AUD 1.00 per share valuing Indophil at AUD 426 million
2. Premium of 28% to last close of AUD 0.78
3. Premium of 29% to one month volume weighted average price of Indophil shares
4. Pre commitment from Indophil’s largest shareholder, Lion Selection to accept the Xstrata offer with respect to 17.76%, taking Xstrata's relevant interest in Indophil's shares to 19.99%
5. Provides Indophil shareholders with an immediate opportunity to realise the full value of their stake in the Tampakan copper project in the Philippines for a risk-free, attractive cash premium that fairly values the potential of the project
6. Enables Xstrata to increase its interest in the issued common shares of Sagittarius Mines Inc, the holder of the Tampakan copper project to 100%
Xstrata also announces that it has entered into a pre bid acceptance agreement with Lion Selection Limited, the largest shareholder of Indophil in respect of a 17.76% stake in Indophil.
Indophil’s flagship asset is its 34.23% interest, with a right to acquire an additional 3.27%, in the Tampakan copper project in the southern Philippines. Xstrata Copper has management control and holds 62.5% of the issued common shares in Sagittarius Mines Inc, the holder of the project.
The Offer will be subject to certain customary conditions, including:
1. Xstrata obtaining a relevant interest in 90% of Indophil's shares and Indophil's securities convertible into shares;
2. No objection to the acquisition by Australia’s Foreign Investment Review Board;
3. The absence of a material adverse change with respect to Indophil’s business and assets; and
4. No prescribed occurrences as listed in section 652C of the Corporations Act 2001.
In addition, the offer will be conditional on the 50.1% minimum acceptance condition in the Indophil takeover offer for Lion Selection not being satisfied or waived or Indophil not declaring its offer for Lion Selection to be unconditional.
Mr Charlie Sartain CEO of Xstrata Copper said that “This offer represents a highly attractive premium to Indophil’s current share price and gives its shareholders an immediate opportunity to realise a cash value for their investment without the risks inherent in developing a project of this scale. The decision by Indophil’s largest shareholder, Lion Selection, to accept Xstrata's offer in respect of 17.76% of the shares in Indophil confirms the attractive value proposition offered.”
Deutsche Bank is acting as financial adviser and Allens Arthur Robinson is acting as legal adviser to Xstrata in relation to the Offer.
