Xstrata to Up the Rival Bid for Indophil

Submitted by Share Trading on 23 June, 2008 - 11:08

Anglo Swiss Global miner Xstrata has decided to match the rival bid for Australian listed Indophil Resources Limited. It has currently placed its bid for $1 per share as the take over bid for INdophil Resources. The Crosby consortium led by Hong Kong bank currently leads the take over proposal with its $1.28 per share bid. Xstrata had announced on Friday that it shall not lift its bid of $1.00 per share but now seems to have quickly changed its mind and decided to match the $488 million take over bid for the giant underdeveloped copper mine in Philippines.

Xstrata has initially placed a bid of A$398 million as offer price for Indophile which was quickly countered by A$488 million offer from consortium of investment groups led by Crosby Capital, Alsons Group and Indophile Chief Executive Richard Laufmann. Now, Xstrata is ready to match the $1.28 price as well.

Lion Selection is currently the largest shareholder of Indophil that owns 25.4 percent shares has agreed to sell its 17.4 percent share to Xstrata. Shareholders of Lion Selection shall vote for the proposal on Monday. However, the company has asked its shareholders to vote against the proposal unless Xstrata matches the A$1.28 share price.

Tampakan copper-gold project in Philippines is Indophil's largest asset where it holds 32.5 percent stake. It is one of the biggest untapped resources of natural ore for gold and copper. Xstrata hopes that the shareholders shall vote in favour of the company after matching the offer made by Crosby consortium. Xstrata has an agreement with Lion Selection that gives it right to match any competing offers even 24 hours before the meeting of shareholders of the company. According to this agreement, Lion would accept the $1 per share price for 17.7 percent of Indophil which would give 19.9 percent stake of Indophil to Xstrata.

Shareholders of Lion Selection still hold the right to reject the offer if they expect that Crosby consortium would come up with a higher counter offer. The share prices of Indophil have already skyrocketed 23 cents higher to $1.395 on Friday. The current share price is at a 38 percent premium to Xstrata's original price of $1 per share and 8 percent higher to its current bid of $1.28 per share.