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PERTH (miningweekly.com) – Takeover target Iron Ore Holdings (IOH) on Friday told shareholders that it would start an active campaign recommending the takeover offer from fellow-listed BC Iron, after its second largest shareholder also accepted the offer.
Earlier this month, BC Iron announced that IOH’s largest shareholder, Australian Capital Equity, had accepted the takeover offer for its 52.7% shareholding in the company.
BC Iron’s stake in IOH has now increased to 71.97%, after shareholder Third Wave Investors also accepted the offer.
BC Iron is offering IOH shareholders 0.44 of its own shares, and 10c in cash for every IOH share, valuing the takeover target’s shares at A$1.59 each. The offer represents a 79% premium to the junior’s 60-day volume-weighted average price of 89c a share.
“There has been positive feedback from the large majority of IOH’s shareholders to the offer, and IOH will commence an active campaign recommending that the remaining shareholders accept the offer,” IOH MD Alwyn Vorster said on Friday.
Vorster said that the offer remained compelling, considering the current market conditions for iron-ore, and would create a combined entity with strengthened technical and financial scale, which was better able to operate in challenging market conditions.