CALEDON Resources has agreed in principle to be bought by a subsidiary of Chinese investment group Guangdong Rising Assets Management (GRAM), sending the coking coal producer’s London-listed shares to their highest level in more than two years.
The possible offer, which is subject to certain conditions including the recommendation of Caledon’s board and Chinese regulatory approvals, would be for 112p per share in cash – a 33 per cent premium to Caledon’s Friday price that values the firm at £251.6m.
Shares closed up 16.7 per cent at 98p, the second-biggest percentage gain on the London Stock Exchange yesterday.
State-owned GRAM, which is the second largest shareholder of China Telecom, expects to be in a position to satisfy or waive these pre-conditions by the end of December.
Caledon said it received an unsolicited offer at 68p per share in July, but rejected it as significantly undervaluing the company. The offer came just weeks after Caledon’s largest shareholder and ex-suitor Polo Resources ended talks.
Caledon directors are supportive of the possible acquisition, the company said in a statement.
RICHARD Horrocks-Taylor, Martin Eales and Stephen McPherson are advising Caledon on the takeover, having worked with the firm during doomed talks with Polo in June.
Horrocks-Taylor, a chartered accountant, has worked at RBC since 2006. He spent eight years working on deals in the mining and metal sector in London and South Africa for JPMorgan, before becoming managing director of Hatch, an employee-owned corporate finance firm. He holds an MA in politics, philosophy and economics from Oxford University.
Martin Eales joined RBC in 2006 from Collins Stewart, though he has been advising Aim and main market companies on takeovers and listings since 1998. He became corporate finance director at Westhouse Securities in 2004, after helping transform the business from its previous guise as Brown, Shipley & Co.
Eales acted as joint broker for Resolution during its rights issue in August, and advises several natural resource players including Petra Diamonds and Pan African Resources.
Stephen McPherson worked in Canada before moving to RBC’s London office in 2009. His recent work includes advising Black Marlin Energy when it was taken over by Afren in October.
City A.M. Reporter