Metro set to make Gulf Alumina takeover bid

1592
Image credit: www.metromining.com.au

Metro Mining has unveiled planes to make a takeover bid to acquire all of the issued shares in Gulf Alumina, the Australian developer of bauxite deposits.

Image credit: www.metromining.com.au

The move comes after Metro gained support from Gulf’s largest and key founding shareholder and secured a 20% interest in the company.

According to the Brisbane-based exploration and mining company, the offer will see Gulf shareholders receive 3.3 new Metro shares for every 1 Gulf share held and will own approximately 44% of the combined group.

The transaction will create a leading independent Australian bauxite company, well positioned to capitalise on the positive outlook for the Australian seaborne bauxite sector, and will provide an attractive investment for both existing and new shareholders.

Adertisement

It will create an attractively scaled and long-life development project with significant reserve base and the ability to realise significant operational and development synergies through economies of scale, improved efficiency and the removal of duplicated costs.

If it materialises, the takeover will also place the combined group in a stronger position to secure product sales on improved terms and provide the opportunity to create significant value by developing adjacent and complementary projects on a combined rather than stand-alone basis.

Commenting on the company’s takeover bid, Metro’s Chairman Stephen Everett said the logic of the combination was perfectly “clear and compelling”.

“Metro’s and Gulf’s adjacent bauxite development projects at Skardon Rover are complementary given their similar scale, mining and export methods. By combining the two projects we will create value well in excess of what is achievable on a stand-alone basis,” Mr Everett said in a media statement.

“Opportunities include the removal of duplicated capital and operational costs, operational efficiencies, a simplified permitting process and an enhanced position for the combined group to secure product sales and financing on improved terms.”

He said he was pleased that Gulf shareholders recognised the merits of the offer, adding that the formal offer will be made in “due course”.