A quiet, billion dollar all paper takeover was revealed in the resources sector yesterday that will have little impact on Australia, other than see two miners with growing offshore interests join together.
It’s a proposed merger in the copper sector where the world price has jumped sharply this year, hitting $US8,000 a tonne earlier this month.
The Canadian-Australian copper miner Equinox Minerals yesterday launched an agreed $A1.25 billion takeover of the smaller Australian-listed Citadel Resource Group, a move that will see Equinox move into the Middle East.
The acquisition has the potential to give Equinox the same copper output as the present capacity of the huge BHP Billion Olympic Dam mine in South Australia the world’s fourth-largest deposit.
Equinox is offering one of its shares for every 14.3 Citadel shares plus A$0.105 in cash for each share in Citadel, which is developing Saudi Arabia’s largest copper mine.
Based on Equinox’s volume-weighted share price of A$4.95 over the 10 days to October 22, the value of the offer is 52.2 Australian cents per Citadel share, compared with Citadel’s closing price on Friday of 42.5 cents, Equinox said in the statement yesterday.
Equinox shares rose 3% yesterday, or 18c, to $5.95.
Citadel shares naturally had the biggest rise in percentage terms, up 8c, or 18%, to 50.5c.
That early indication tells us punters do not see a rival bid emerging as yet.
Equinox’s main project is the Lumwana copper mine in Zambia, which it commissioned in 2009 and this year is forecast to yield 140,000 tonnes of copper.
Citadel owns 70% of the Jabal Sayid copper mining project in Saudi Arabia, with rights to acquire 100%. It revealed plans to acquire the outstanding 30% last month.
It has paid $112.5 million for the remaining 30% stake in the mine.
Forecasts call for annual production of around 60,000 tonnes of copper over the first three years of the mine’s estimated 10-year operating life starting in 2012.
Craig Williams, Equinox chief executive, said Citadel was a perfect fit, in line with his company’s strategy of growing its presence in copper mining.
“The acquisition of Citadel will achieve our stated goal of securing a significant near-term development project in a mining-friendly jurisdiction,” Mr Williams said in the statement.
Each Citadel director and a number of Citadel shareholders, including its joint venture partners in the Jabal Sayid mine, collectively representing 19.9% of Citadel’s share register, have already struck separate pre-bid acceptance agreements with Equinox for all their Citadel shares, according to Equinox’s statement yesterday.
That’s why the Citadel share price traded at a discount to the suggested offer price yesterday, which should have been much higher than 52.5c after the 18c rise in the price of Equinox shares.
After the deal is completed, Equinox shareholders will own about 81% of the combined company and Citadel shareholders will own 19%.
According to the Financial Times, Westfield is negotiating to sell a chunk of its huge London shopping centre, now under construction opposite the 2012 Olympic Games site in the British capital.
"The £1.5bn Westfield shopping centre that forms the gateway to the 2012 Olympic Games will be part sold to a new fund backed by some of the world’s largest property investors being set up by Henderson Global Investors," the FT reported.
Westfield had not made a statement to the ASX yesterday on the proposed sale report.
The securities ended at $12.32, up 8c.
The move, if completed, represents a strategic de-risking by Westfield on its UK presence, which was to be the next leg of its expansion after the US, Australia and New Zealand.
The UK economy is slowly recovering, although there are now fears the big spending cuts announced last week by the government will put more than half a million people out of work over the next couple of years and force the economy back into contraction.
The FT said Westfield is in "advanced talks to sell a stake of as much as £750m to Henderson, which is expected to create a fund structure open to a group of major clients".
The news was contained in late editions in the US media on Monday.
The Stratford will cost £1.45 billion pounds by the time it is completed in the second half of next year and will be home to more than 300 retailers. It will be the second largest shopping centre in the UK.
The scheme will also include 1.1 million sq ft of offices and two hotels. More than 70% has been let to retailers so far, with talks under way to complete the remainder of the lettings before the centre’s planned opening in September next year.
It is the second London centre for Westfield. The earlier one at White City opened in late 2008.
Westfield stopped work on its other UK shopping centre developments, including one in Bradford in 2009 because of the downturn, but it indicated in May that it was getting more confident about some projects. It has started spending mo
