Jabiru bid kicks off surge of mergers
Sydney Morning Herald
Thursday February 10, 2011
NICKEL and gold group Independence Group's friendly $532 million bid for base metals producer Jabiru Metals has kicked off the predicted flood of merger and acquisition activity by second-ranked miners.The combined group will have market capitalisation of $1.5 billion as well as some $271 million in cash to pursue further growth, as both are enjoying bumper cash flows due to strong commodity prices.In the agreed takeover, Independence will offer one of its shares for every eight Jabiru shares. Based on Independence's closing price, the bid values Jabiru at 96.1 a share - a 44.5 per cent premium on Jabiru's last market price of 66.5.Third parties may yet oppose the takeover but Independence has put its foot on the 19.97 per cent of Jabiru held by Jabiru's major shareholder, Metals X Ltd. Jabiru is recommending the bid in the absence of a higher offer.Independence's managing director, Chris Bonwick, said the acquisition was a key step in the group's plan for a "great multi-commodity Australian mining company".His counterpart at Jabiru, Gary Comb, said the board regarded the Independence bid as a "compelling opportunity for Jabiru shareholders to capture a premium for their shareholding in Jabiru while maintaining an ongoing exposure" to Jabiru's mines and growth projects.Independence is a low-cost producer of nickel at its Long mine in Western Australia, an operation originally acquired from WMC Resources, now part of BHP Billiton. Jabiru is a low-cost base and precious metals producer from its Jaguar/Bentley project, also in WA.Both companies have near-term growth locked in. Independence has a 30 per cent share of the Tropicana project in WA. Tropicana, operated by the South African group Anglo- Gold Ashanti, is the biggest gold mine currently being developed.Jabiru's near-term growth is in its Stockman base metals project in Victoria.The bid carries a 90 per cent minimum acceptance condition.
© 2011 Sydney Morning Herald
