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Rajawali to acquire remaining stake in Indo Mines
Posted on Friday, 10 November 2017 14:39
Diversified holding business Rajawali, through subsidiary Surya Langgeng Utama (Surya), is buying the balance of Australian iron ore miner Indo Mines in a deal worth an estimated AUD 4.61 million (USD 3.53 million) in cash.
The takeover offer of AUD 0.02 per share represents an 11.1 per cent premium over the closing price on 27th October 2017, the last trading day prior to the announcement.
Rajawali’s affiliates already hold 57.1 per cent of Indo Mines; the transaction is subject to the group upping the stake to at least 90.0 per cent, among other conditions.
The target is appointing an independent expert to review the bid and its board has advised shareholders to take no action in relation to the offer in the meantime.
No further details have been disclosed.
Australian Securities Exchange-listed Indo Mines has recently been focusing on its interests in pig iron, the metallic product of a furnace that contains over 90.0 per cent iron.
Through its 70.0 per cent investment in the Jogjakarta Iron Project in Indonesia, it plans on becoming the lowest cost pig iron producer worldwide.
However, the development of the iron sands project, which is based in Kulon Progo, has been blamed for the company’s declining results this year.
It reported a total comprehensive loss of AUD 7.96 million for the twelve months ending 30th June 2017, widening from a loss of AUD 4.73 million for last year.
Established in 1984, Jakarta, Indonesia-based Rajawali has business ventures and portfolios spanning the agriculture, mining, transportation and property industries and over 33,000 employees.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 73 deals targeting iron ore mining firms announced so far this year.
The most valuable such transaction was Brazilian company Vale’s USD 1.85 billion acquisition of Valpar, which completed in August.
© Zephus Ltd