Afferro Mining share price soars as board recommends IMIC offer

Suzie Neuwirth
AIM-LISTED Afferro Mining’s shares soared over 11 per cent yesterday after it agreed to recommend a takeover offer from the International Mining and Infrastructure Corporation (IMIC) to its shareholders.

Resource-focused investment house IMIC will offer 80p in cash plus a two-year convertible loan note with the principal value of 40p for each share of the iron ore miner.

A definitive agreement will be drawn up in the next couple of weeks and a shareholder vote is expected in July.

Alison Turner, analyst at Panmure Gordon, said the offer was “at a level well below our valuation of [Afferro]”, a view which Luis da Silva, chief executive of Afferro, refuted.

“While I believe that there is additional value in our company, the economic landscape has changed dramatically,” he told City A.M. “It is important to deliver a deal and for shareholders to be able to take some money off the table.”

Haresh Kanabar, chairman of IMIC, said that he was confident that Afferro shareholders would accept the “very generous” offer and that he planned to expand the management team this year once the deal was completed.

IMIC announced earlier in May that it had managed to raise the $100m (£64m) it needed to finance the bid, surprising analysts.