Cancelled Bid As Mining Company’s Consultants Report ‘Unfair’ Offer
Following KPMG’s report that Regent Pacific’s bid for the shares of a mining company is not fair for its stakeholders, a $345 million deal has been terminated.
BC Iron’s board of directors harked KPMG’s report that the $3.30-a-share bid was not in the best interest of shareholders, thus turning down the bid offered by the Hong Kong-listed Regent Pacific.
Yesterday, shares were down by 2.11 percent to $2.79 at BC Iron, which is based in Perth, Western Australia. Late last month, a $7.1 billion takeover deal between Canadian goldminer Barrick Gold and Perth-based copper company Equinox Minerals was successful.
However, the prospective increase in the shares of Ukrainian billionaire Gennadiy Bogolyubov to 22 percent in the mining company is expected to move BC Iron back to the limelight.
Regent Pacific recently took down its $3.30-a-share offer over concerns that Consolidated Minerals, one of BC Iron’s shareholders, would decline the bid.
But the mining company complained to the Takeover Panel over Regent Pacific’s withdrawal, forcing the firm to push through with the deal.
Mike Young, managing director of the mining company, told reporters yesterday that the value of BC Iron had increased after the $3.30 bid was offered in January and the prices of metals alike.
The mining company operates the Nullagine project in joint venture with Fortescue Metals Group.
When Regent Pacific made its offer four months ago, the Pilbara region was in wet season, though BC Iron continued with its operations taking into account the risk of timing, Young added.
After the bid was launched, BC Iron has since shipped its first ore with an upgraded guidance, targeting 5 million tonnes in the first half of 2012.
At the same time, Jamie Gibson, chief executive officer of Regent Pacific made his resolve not to raise its bid beyond $3.30 per share, saying the offer is fair.
Gibson said his company “applies a disciplined approach to employing capital.”
Regent Pacific will focus on other growth opportunities available from various natural resources, Gibson added.