Flinders Mineshas received a takeover offer from Russian steel giant Magnitogorsk Iron & Steel Works of AUD 0.30 per share, which is a 92.5% premium to the 30 day volume weighted average price of Flinders Mines’ shares to 22 November 2011 and significantly higher than the average takeover premiums of 30%.

The acquisition of 100% of Flinders shares by Magnitogorsk Iron & Steel Works implies a fully diluted value for Flinders of approximately AUD 554 million.

Flinders’ directors have unanimously recommended shareholders accept the deal in the absence of a superior proposal and plan to accept Magnitogorsk Iron & Steel Works’ offer with respect to their own shareholdings.

Flinders will now commission an independent consultant to assess whether the offer is in the best interests of shareholders.

In September Flinders announced that it had engaged financial services firm Citi to assist the company in undertaking an in depth review of its strategic options. Magnitogorsk Iron & Steel Works was approached by Citi as part of the strategic review process and confidential discussions have been taking place between Flinders and Magnitogorsk Iron & Steel Works.

The company believes the takeover offer eliminates all development risk for its Pilbara Iron Ore Project.

Earlier in the month Flinders increased the company's global resource at the project to 917 million tonnes at 55.2% iron. Importantly, some of the resource is contained in the higher confidence categories, with Measured Resources of 101 million tonnes at 56.4% iron, Indicated Resources of 343.7 million tonnes at 55.5% iron, with the remainder being Inferred Resources of 472.6 million tonnes at 54.7% iron.

WorleyParsons is currently undertaking a Definitive Feasibility Study at the project, with the latest resource being integrated into the study.

(Sourced from Proactiveinvestor.com.au)