IMIC confirms Afferro approach

BIDDING for junior stockmarket-listed Afferro Mining hotted up yesterday, as fellow AIM-listed International Mining & Infrastructure Corporation (IMIC) confirmed that it had approached the miner with regards to a possible takeover offer.

IMIC has proposed an offer at between 115p and 140p for each Afferro share, which would value the iron ore miner at around £140m.

Afferro, which owns three iron ore projects in Cameroon, West Africa, is currently in discussions with a number of other firms regarding an offer, and is under an exclusivity agreement with one that prevents any discussions with IMIC until 13 January.

IMIC said yesterday that it was yet to receive a formal response from Afferro regarding its approach, and stressed there was no certainty that an offer would be made.

Analysts at RBC Capital Markets highlighted that a competing bid “could emerge in the event of a formal offer from IMIC”.

“While no deal appears imminent at this stage, we believe there remains upside potential for Afferro shares, as evidenced by the potential IMIC offer price range,” the analysts added in a note.

Afferro shares fell slightly on the news, and closed down 0.74 per cent at 100p yesterday.



Neil Elliot and Chris Sim from Investec are working with Afferro Mining.

Elliot, the nominated adviser, joined Investec in January 2012 following the takeover of Evolution Securities, and has acted for a number of natural resources companies including Kentz Corporation, Gulf Keystone, European Goldfields and Sterling Energy. He was a key member of the team advising Firestone Diamonds on its takeover of Kopane Diamonds in 2010 and ENK on its acquisition by DMCI Holdings and D&A Income Limited in 2012. Elliot also recently advised on the takeover of Nautical Petroleum by Cairn Energy.

Sim, acting as the corporate broker, joined Investec in January 2012 from Evolution. While at Evolution he worked on a number of transactions including fundraisings for Coal of Africa, Afferro Mining, UK Coal, Circle Oil and Nautical Petroleum and the IPO of Kentz Corporation. Since joining Investec, Sim advised on the takeover of Nautical Petroleum for £414m by Cairn Energy and the accelerated book build for £65m in Kentz Corporation.

RBC Capital Markets is working as Afferro’s joint corporate broker. Working with IMIC is Bank of America Merrill Lynch and WH Ireland.