SWISS mining giant Glencore has launched a A$268m (£171.5m) bid to gain outright control of one of Australia’s largest nickel miners, Minara Resources, in a move that marks its second acquisition since its flotation in May.
The global commodities trader said yesterday it is offering A$0.87 in cash for Minara shares, of which it already owns 73.44 per cent, valuing the company at $1.02bn.
In a bullish letter to Minara’s board, Glencore said the bid, pitched at a 35.9 per cent premium to Minara’s last closing price of A$0.64, offered “an attractive exit opportunity” for shareholders and given its majority holding “it considers it unlikely that an alternative takeover offer will emerge”.
Minara is Australia’s second largest nickel producer, after BHP Billiton’s Nickel West division. It controls 60 per cent of the Murrin Murrin nickel mine in Western Australia, slated to yield more than 40,000 tonnes of the steel-making component a year.
Dominic O’Kane at Liberum Capital said: “This is typical of the type of merger and acquisition we expect Glencore to undertake in difficult markets, playing to its strengths of transacting mid-tier acquisitions where it already has relationships, eschewing jumbo deals.”
The offer will open next week and close on 10 October according to statements by both companies. Minara has advised shareholders not to take any action until it has had time to review the offer.
All eyes will be on Glencore today as it publishes its first half of year results. Like others in the sector, the company has struggled with the depressed demand for commodities as the global economic slowdown.
In the three months since the group’s over-subscribed listing in London and Hong Kong, its share price has been steadily declining. Last Friday, shares closed down 35 per cent below its flotation price of 530p in May.
Investors were cheered by the news of the offer last night, with shares closing up six per cent to 389.60p.