Miner Cleveland-Cliffs offers to buy out Portman
|
|
|
SYDNEY (Reuters) - U.S. miner Cleveland-Cliffs Inc made a friendly A$560 million ($450.5 million) offer to buy out Australian iron miner Portman Ltd on Thursday, and is seeking a 30 percent stake in a second Australian miner.Its A$21.50-a-share bid for Portman represents a 21 percent premium to Portman's closing price of A$17.70 on Wednesday.Portman, already owned 85.19 percent by Cleveland-Cliffs, said on Thursday its independent directors felt "the likelihood of a superior offer being received from a third party is remote."The independent directors would recommend the offer in the absence of a higher bid, pending an opinion supporting the transaction by accountants KPMG.Separately, Cleveland Cliffs agreed to pay A$26 million for shares and options over 30 percent of AusQuest Ltd , which is prospecting for manganese in west Australia.Portman ended 19.2 percent higher at A$21.10, while Ausquest closed 50 percent up at A$0.285, though still less than half its share price in May.Outside of Australia, Cleveland-Cliffs sales are confined mostly to Canada and the United States after pulverizing relatively low-grade ores into tiny pellets favored by steel-makers in North America.Portman sells higher-grade ore from its mine in the far western Australian outback, mostly to China and some to Japan.At the time of the initial acquisition of Portman shares in 2005, Cleveland-Cliffs made it clear it was looking to penetrate the Chinese market for raw steel making materials.Cleveland-Cliffs said its offer was final."The offer provides a straightforward cash exit for Portman shareholders and accepting shareholders will not incur brokerage or stamp duty charges," Cleveland-Cliffs Chairman Joseph Carrabba said in a statement.Prices for iron ore and other commodities have boomed in recent years as demand from China and other developing countries grow faster than the industry can dig new mines. The trend has in turned sparked a raft of corporate activity in the sector as firms seek to expand operations and increase profits.Besides iron ore, Cleveland-Cliffs is a major supplier of metallurgical coal to the global steel-making industry.It also has three coking-coal mines in West Virginia and Alabama in the United States as well as a 45 percent interest in the Sonoma project, an Australian coking and thermal coal development in the northeastern state of Queensland.Shares in Cleveland-Cliffs, which has a market value of $7.25 billion, closed 5.9 percent higher at $71.96 in New York trading on Wednesday.Azure Capital is acting as financial advisor to Portman while Wilson HTM is advising Cleveland-Cliffs.Under the Auquest deal, Cleveland-Cliffs will subscribe for 66.7 million new AusQuest shares at A$0.40 per share.Ausquest Managing Director Graeme Drew said the funds will be used to help pay three years of exploration work to find manganese, a necessary ingredient in steelmaking.($1=1.243 Australian Dollar)(Reporting by James Regan and Fayen Wong)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
FDIC: 'Problem' banks at 16-year high in US
Washington - The number of US banks in danger of collapse has risen to the highest level in 16 years, a government regulator reported Tuesday in a sign that the country's worst financial crisis in decades is still lingering. The Federal Deposit Insur...
American shoppers lace up racing shoes for Black Friday
Los Angeles - Up to 134 million Americans are expected to splash out with their cash when the holiday shopping season kicks off on traditional Black Friday. The National Retail Federation Tuesday said it anticipated that the easing recession will sen...
US stocks edge lower on revised growth figures
New York - US stocks fell slightly on Tuesday as government figures showed that last quarter's economic rebound was smaller than initially thought. The Commerce Department in an updated estimate said the economy grew at an annual rate of 2.8 per cent...
US economic rebound smaller than thought; Fed optimistic - Summary
Washington - The US economy's rebound from a deep recession was smaller than initially thought, according to new government figures Tuesday, while the Federal Reserve said it expects the country's recovery to pick up...
EXTRA: US central bank issues rosier outlook on economy
Washington - The Federal Reserve Tuesday raised its growth forecasts for the US economy, but warned that unemployment in the United States will remain for some time at its highest levels in a generation. The US central bank projected the world's larg...
US levies first-ever fines on airlines who stranded passengers
Washington - Three US airlines were fined a total of 175,000 dollars on Tuesday for leaving passengers stranded nearly six hours on an aircraft, the first-ever such penalty imposed by the US government. Continental Airlines and ExpressJet Airlines we...
US economy grew 2.8 per cent in third quarter - Summary
Washington - The US economy grew at an annual rate of 2.8 per cent in the third quarter of this year, according to an updated government estimate Tuesday that confirmed the United States has likely emerged from its deepest recession in decades. But t...
|
|
|
|
|
|
|
|
