Wednesday, September 03, 2008 Swiss miner sets deadline for copper project bid
SWISS miner Xstrata Copper has opted not to extend it takeover offer for the Tampakan project, which lapsed on August 29, to the apparent "delight" of Australian firm Indophil Resources NL, which has been vouching for the tender of a consortium.
Xstrata had wanted to wrest control of all the shares of Indophil at the Tampakan project, touted as the largest undeveloped copper deposit in Southeast Asia.
In a 67-page target statement issued on Monday, Indophil urged its shareholders to accept the offer made by Stanhill Resources Pty Limited because it is superior compared to that of Xstrata.
"The aggregate value of the Stanhill proposal is assessed at Au$1.299 to Au$1.308 per share by the independent expert engaged by Indophil. This is superior to Xstrata's offer of Au$1.28 per share," said Brian Phillips, Indophil chair, in his letter to Indophil shareholders.
"The independent expert has concluded that the Stanhill offer is not fair, but reasonable, and recommended that shareholders accept the Stanhill offer," he added.
Stanhill offered Indophil shareholders Au$1.28 per share plus, if the Stanhill offer is successful, an 80 percent interest in Indophil's non-Tampakan assets.
Xstrata initiated the intra-corporate bidding war a few months ago by offering to buy all the stakes of Indophil at the Tampakan project at Au$1 per share. It eventually matched the Au$1.28 takeover bid of Stanhill, formerly the Crosby consortium.
Xstrata owns 62.5 percent of the Tampakan project while Indophil Indophil holds a 34.23 percent interest that will rise to 37.5 percent as certain project milestones are achieved.
Initial company studies showed that the Tampakan project potentially contains 1.6 million tons of copper and 14.6 million ounces of gold at a 0.3 copper cutoff grade.
Stanhill's offer is due to close on September 22 while Xstrata's conditional offer lapsed on August 29. Originally, the Xstrata offer would have closed last August 15.
Charlie Sartain, Xstrata Copper chief executive officer, said the decision not to further extend the cash offer to Indophil shareholders beyond August 29 underlines the company's disciplined approach to acquisitions.
"We see no value in remaining involved in a competitive process with the Stanhill Resources/Crosby Consortium. In our view, there must be a high degree of uncertainty concerning the financing of the Stanhill bid, particularly in light of the significant future funding obligations and lack of exposure to product for marketing for the Tampakan project that any eventual owner of Indophil Resources faces, together with the fact that Tampakan will not generate cash for several years," Sartain said.
As majority owner and operator of the Tampakan project, Sartain said his company remains fully committed to developing the Tampakan project in a manner that is consistent with Xstrata's industry-leading approach to responsible social and environmental management. (BSS)
