Global mining giant Xstrata has launched a friendly takeover bid for Australian-based Sphere Minerals, valuing them at A $428 million. The iron ore prospector Sphere Minerals is active in Mauritania. Xstrata is looking to acquire all the shares in Sphere Minerals for A$ 2.50 dollars a share via its subsidiary Sidero.
Since Sphere Minerals was a mining and exploration company with three large iron ore projects in Mauritania it would help Xstrata Coal’s bulk mining and project development capabilities. The projects are the large scale Guelb el Aouj project, the near term Askaf project and the Lebtheinia project.
The Chief Executive of Xstrata Peter Freyberg said in a statement that Xstrata has the financial and technical capabilities to expedite the development of Sphere’s green field growth projects and manage the inherent risks involved.
The directors of the West African focused Sphere Minerals have backed the bid by Xstrata unanimously saying that it offered an attractive premium. They will sell their shares and options into the bid.