[miningmx.com] — MARKET sources indicate a serious Chinese contender has finally decided to make a bid for Metorex, in opposition to Vale’s 735c a share cash offer for the company.
There has been speculation in the market over such a development since the Vale bid was announced in mid-April, with Jinchuan Mining singled out as the most likely bidder. Inexplicably, nothing had happened until this week.
Jinchuan is the company which now controls Wesizwe Platinum after heading up a Chinese consortium which paid R6.6bn for 51% of Wesizwe.
It’s significant that Metorex has put out this latest cautionary on the same day it released the circular to shareholders setting out the timetable on the Vale offer over which shareholders are due to vote on July 22.
It’s also significant that a cautionary over an approach which at this stage is described as a “non-binding expression of interest’ has been published, given the agreement with Vale that Metorex cannot solicit other bids.
It seems Metorex could be walking a fine line between keeping its shareholders informed of developments and risking being accused by Vale of breaching its agreement.
According to the cautionary notice, “the expression of interest provides for certain pre-conditions to be met before the alternate party will be prepared to express a firm intention to make an offer, inter alia, a due diligence conducted to the satisfaction of the alternate party.
“Shareholders are further advised that there is currently no certainty that Metorex will receive a firm intention to make an offer from the alternate party.’
All of which seems, frankly, pretty tenuous leading to an obvious question – why has Metorex published this cautionary?
Metorex chairperson Rob Still declined to comment on this when approached, and also declined to identify the “alternate party” involved.
The cautionary also stated “the board will provide the alternate party with access to the same information as was provided to Vale”.
But Still, in his address to the Metorex annual general meeting on Wednesday, told shareholders that Metorex had opened up a data room late last year “to allow qualified and credible parties the necessary data access to thereby facilitate any credible offer for the company to be considered by shareholder’.
So, could that mean this latest approach has come from a new party which did not give Metorex the once-over at the end of last year?
Again, Still declined to comment.
Metorex shares rose 4% to 761c in Friday morning trade on the JSE, following release of the cautionary notice.
– The writer owns shares in Metorex.
