Glencore bids for Australian nickel miner

Shares of Minara Resources jumped 36% today on news of a takeover bid by Swiss-based commodities trader Glencore Resources.

Glencore, which went public in May with an astonishing $11 billion IPO, is seeking to buy a minority position in Minara, of which it already owns 73.4%, for AU$268 million.

According to The Wall Street Journal (sub required), Minara’s only producing asset is the Murrin Murrin mine in Western Australia, which accounts for about 2% of global mined nickel output. Glencore owns 40% of the mine.

Glencore says its offer represents a 36% premium on Minara’s Aug. 23 closing share price of 64 cents.

The WSJ quotes Goldman Sachs analyst Ian Preston, based in Melbourne, saying the takeover is a “done deal”, and suggested that other large companies could use weak markets to mop up minority stakes in mining groups.

“Corporates are taking a longer-term view than the markets,” Mr. Preston said, citing Rio Tinto PLC’s and Mitsubishi Corp.’s similar joint offer earlier this month for Coal & Allied Industries Ltd., an offer that valued the target at A$10.6 billion.

While analysts speculated that the Glencore IPO would put the company in a strong position to make acquisitions, so far the only transaction has been a US$475 million stake in a Peruvian copper mine it bought from CST Mining Group.