Brockman and FerrAus in merger talks to thwart Chinese takeover
25 Jan 2011
Australian junior iron-ore miners Brockman Resources and FerrAus Ltd have initiated merger talks in order to thwart a $1-billion takeover from Chinese group Wah Nam International Holdings Ltd.
Hong Kong-based Wah Nam, holding 22.6-per cent stake in Brockman and 19.9 per cent stake in FerrAus, had launched a takeover bid for both iron ore miners in November.
Wah Nam had made an off-market takeover bid of 30 of its own share for 1 share of Brockman or A$6.47 a share for Brockman, valuing the Perth-based junior iron ore miner at A$932-million.
The board of Brockman had rejected Wah Nam's offer citing the Chinese company lacked the mining development expertise and operational experience to complete the Marilana mine.
It also got an interim order from the Australian Takeovers Panel prohibiting Wah Nam or any other local company from acquiring any shares of Brockman and also provisionally prohibited them from disposing or transferring their shares in Brockman, or exercising any voting rights over their Brockman shares.
Emerging iron-ore-miner FerrAus also rejected Wah Nam's takeover offer of six of its own share for 1 share of FerrAus or $229.97 million saying that the offer was an all-scrip offer and cited the low value and liquidity of Wah Nam shares, which had dropped by 22 per cent since the bid was announced in November.