Brockman Resources has decided to reject the offer made by the Chinese company Wah Nam International. The iron ore producing company chairman Barry Cusack said that the board of directors would be calling unanimously for share holders to refuse the $930 million offer from the Hong Kong listed company.
Mr Cusack said that the directors had considered the lack of experience of Wah Nam in the mining sector and also questioned the value of the offer. There was insufficient evidence to support the fact that Wah Nam would be able to successfully develop the Marillana project. He said that the reasons for the rejection were to be explained in detail to shareholders in a target statement.
Wah Nam has offered 30 of its shares for each of the Brockman Resources shares. However they intend to takeup 50% of all issued Brockman shares as a condition. It has also made an offer for another iron ore company, FerrAus.
FerrAus released a pre-feasibility study that valued the Pilbara iron ore project of the company between $1.12 to 1.34 billion. There would be an initial rate or return of about 24 to 26%. The company is still considering the offer made by Wah Nam.