Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
African Iron’s board has recommended shareholders accept a $338 million takeover offer from Exxaro first announced on Jan. 11, The Australian reports:
The South African miner is offering 51 cents for each African Iron share and 31c for each listed option. If Exxaro acquires at least 75 per cent of African Iron’s shares, it will boost its takeover offer to 57c per share and 37c per option.
African Iron’s largest shareholder, Cape Lambert, has accepted the offer.
Shares in Australia-listed African Iron (ASX:AKI), whose main asset is in the Republic of Congo, soared 40% on the 11th when the takeover was announced.
Chairman Ian Burston told The Australian a week ago that the cash bid “offered a significant transaction for the company and the Republic of Congo,” where the Mayoko project is located. The mine is estimated to cost $300 million to develop:
“In our board’s view, accepting the cash offer mitigates several potential risks that African Iron shareholders might face, particularly in the current uncertain macroeconomic environment, and in the event that iron ore prices fall below their current levels,” Mr Burston said.
