CRM's bid to acquire stake in United Minerals may fizzle
Shanghai. October 16. INTERFAX-CHINA - State-owned China Railway Materials Commercial Corp. Group (CRM) is likely to fail in its plan to take a stake in Australian iron ore miner United Minerals Corp. NL (UMC), as BHP Billiton has offered to fully acquire the miner, according to a BHP announcement on Oct. 16.
BHP has offered to pay AUD 204 million ($187.95 million) for UMC's entire stake, while previously CRM offered AUD 27.2 million ($23.26 million) for an 11.38 percent stake in the miner. The BHP deal is conditional on UMC walking away from the CRM deal.
BHP said they had discussions with UMC in early 2009, but failed to reach an agreement at that time. CRM's offer to buy a stake in UMC in September prompted BHP to present a new takeover proposal to UMC.
According to BHP's announcement, CRM's offer has to get approvals from both the Australian and Chinese governments before Dec. 7, 2009, though if the green light has not been received by that time the two companies can extend the deadline. As part of CRM's proposed deal, UMC would also be required to sign a 10 year iron ore supply contract with CRM to supply 3 million tons of iron ore per annum.
State-owned CRM is engaged in the manufacturing of railway materials, rolling stock, rail, and other railway construction materials in China and overseas.