UPDATE: Xstrata Has 50% Acceptance For Sphere Takeover - Source
November 10 2010 - 4:11AM
Dow Jones News
Xstrata PLC (XTA.LN) has well over the 50.1% acceptance from
shareholders of west African iron ore miner Sphere Minerals
(SPH.AU) needed to take control of the company, according to a
person close to the deal.
The Anglo-Swiss miner had received acceptances amounting to
nearly 44% for its A$513.6 million, A$3-a-share offer by close of
business in Sydney, and was also expecting to receive Genesis
Capital LLC's 7.98% stake into the acceptance facility after an
announcement earlier in the day, the person said.
"The company is confident of getting well over 50%," the person
said.
The move completes a near-three month battle for Sphere, which
is focused on projects in Mauritania that it believes are capable
of producing 65 million tons a year of magnetite iron ore. An
initial A$2.50 a share bid announced Aug. 24 received lackluster
takeup from Sphere shareholders and was upped to A$3 last week
after Singapore-based commodities trader Sin-Tang Development,
backed by a consortium of Chinese steelmakers, launched a rival
proposal to finance Sphere's main Askaf iron ore project through a
A$111 million, A$3.25 a share capital raising and project
finance.
That bid received approval from Australia's Foreign Investment
Review Board Wednesday to raise Sin-Tang's stake to just under 20%
of Sphere, but the permission would be insufficient to reach the
30% required by Sin-Tang's plan.
The battle between one of the world's largest listed miners and
Chinese steelmakers has exemplified the fight between traditional
mining companies and Chinese consumers for the world's few
remaining attractive iron ore assets, which are mainly found in
western and central Africa.
Vale SA, Rio Tinto and BHP Billiton together account for around
two-thirds of seaborne supply of iron ore from their mines in
northeastern Brazil and Australia's Pilbara region. China accounts
for roughly the same proportion of demand for seaborne iron
ore.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689;
david.fickling@dowjones.com
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