Exxaro Bids $338m for African Iron

Shares of Australian-listed company African Iron (AKI) climbed by 14 cents or 35 per cent to 54 cents after it announced that it signed a Takeover Bid Implementation Agreement (TBIA) with South African miner Exxaro Resources for a takeover for all of African Iron's shares.

Exxaro offered to pay 51 cents per African Iron share, valuing the company at $302 million. It is willing to raise its offer to 57 cents granted that the South African miner will be able to acquire at least 75 per cent of African Iron's total shares. This will value the ASX-listed company at $338 million.

Cape Lambert Resources (CFE), African Iron's largest shareholder owning 25 per cent stake of the company, is supporting the takeover as it agrees to sell 20 per cent of its currently owned shares.

African Iron's iron ore operations in the Republic of Congo will help Exxaro in its plans to develop an iron ore asset in the West African region. It lost in a bid last year for the acquisition of Australian iron ore concern Territory to Hong Kong-based Noble Group.