Xstrata in $5bn takeover bid for MIM
MIM Holdings' board has accepted a $4.9 billion takeover offer from Switzerland-based Xstrata. The $1.72-a-share cash offer requires Australian Government approval with the Treasurer currently awaiting a recommendation from the Foreign Investment Review Board.
If successful, the takeover will leave only a handful of local mining companies in Australian hands. It has drawn the angry criticism of Queensland's Premier, Peter Beattie, who says Australia's tax laws give foreign companies advantages over Australian companies when it comes to mounting takeover bids.
The agreed offer price is at the low end of a valuation range of $1.70 to $2.24 made by Grant Samuel & Associates which sparked a negative reaction from MIM's major institutional shareholders, including Deutsche Asset Management.
The Xstrata offer will be voted on in early June by shareholders. MIM's managing director Vince Gauci has already publicly dissented on the offer, arguing that Xstrata has undervalued MIM. Xstrata is 40 per cent-owned by Glencore which earlier attempted to float its coal division Enex Resources on the ASX but failed.