By Robb M. Stewart
MELBOURNE--The Australian arm of Rio Tinto PLC (RIO) controlled
Turquoise Hill Resources Ltd. (TRQ.T) has received a takeover offer
that values the minerals explorer at about 160 million Australian
dollars (US$144.5 million), a sign of Asia's resilient interest in
resources despite weakened commodity prices.
Shanxi Donghui Coal Coking & Chemicals Group Co., a coking
coal and chemicals producer in China's Shanxi province, said
Wednesday it planned to make an off-market bid of A$0.22 a share
for Inova Resources Ltd. (IVA.AU). The offer is a 29% premium to
the previous day's closing price.
The company in a statement to Australia's securities exchange
said it planned to drive forward the development of Inova's mines
and exploration activities.
It has the support of Turquoise Hill, Inova's largest
shareholder with a more than 56% stake. The Toronto-listed company
has agreed to sell a 14.9% stake in Inova ahead of the formal bid,
Shanxi Donghui said.
The offer comes less than a week after Formosa Plastics Group,
Taiwan's largest private company, agreed to invest US$1.15 billion
in a new iron-ore project being developed by Fortescue Metals Group
Ltd. (FMG.AU).
It suggests Asian companies continue to target new sources of
key minerals in resource-rich Australia, even though weaker prices
for coal, iron ore and other raw materials have weighed heavily on
the mining industry and forced companies including BHP Billiton
Ltd. (BHP), Rio Tinto PLC and others to shelve or postpone billions
of dollars in investment, shed jobs and close mines over the past
year.
Inova, previously known as Ivanhoe Australia, is developing
several projects in Australia containing molybdenum, rhenium,
copper, gold, zinc, silver and uranium. It began producing copper
and gold in March 2012 at its Osborne project in Queensland state,
which it bought from Canadian gold producer Barrick Gold Corp.
(ABX) in 2010.
Turquoise Hill's primary focus is the massive Oyu Tolgoi copper
and gold mine in Mongolia, which is operated by its biggest
shareholder, Rio Tinto. Turquoise Hill in February agreed to sell
its 50% stake in private Kazakhstan-focused Altynalmas Gold Ltd.
for US$300 million in cash.
Inova in a separate statement said its board would assess the
terms of the offer before updating the company's shareholders.
The offer is subject to a number of conditions, including Shanxi
Donghui securing at least 51% of its target and approval from
Chinese and Australian regulators.
Write to Robb M. Stewart at robb.stewart@wsj.com
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