Hanlong Mining Investment wants to takeover Sundance Resources. The Chinese mining company is the largest shareholder of Sundance Resources holding 18% stake in the company. In the takeover bid it has offered a price of 50 cents a share.
The bid from Hanlong Mining values the takeover target at $1.4 billion and is conditional on obtaining the majority support from the board of directors of Sundance Resources. Sundance Resources is being advised by UBS AG, Clayton Utz and CITIC Securities as it considers the takeover offer while Hanlong Mining is being advised by Bank of America-Merrill Lynch.
Sundance Resources owns a major iron ore deposit in West Africa. The hunt is on as of now for potential joint venture partners for its Mbalam iron ore project in Africa. The $ 4.7 billion worth iron ore project lies partly in the republic of Cameroon and in partly in the republic of Congo. It was also the area where the entire board of the company perished in a plane wreck last year.
The company has been looking at Chinese investors to develop the project. China has been looking for higher grade ore for its steel making industry and has been buying it from Australia, Brazil and Africa. The iron ore in the Sundance project is suitable for direct shipping to the steel mills and is expected to give 35 million tonnes of iron ore annually.