Shareholders of Australian-based
The world’s fourth-largest coal exporter received the support of 58.5% of voting M.I.M. shareholders and 89.1% of the total number of shares voted at a special meeting in Brisbane. The plan needed to pass by 50% and 75%, respectively.
M.I.M.’s board had already approved the deal, but the company’s CEO, Vince Gauci, denounced the offer as too low. Gauci was joined in his resistance by Platinum Asset Management, which has a 2.5% stake in M.I.M.
In early April, Xstrata tabled a plan to acquire all of M.I.M.’s shares for A$1.72 apiece, a deal that valued the Aussie at A$3.44 billion. The offer represents a 38% premium over M.I.M.’s closing share price on Nov. 20, the day before the two announced they were in talks.
Under the deal, Xstrata will assume around A$1.5 billion in M.I.M. debt.
At presstime, the deal still required the blessing of the Supreme Court of Queensland; it has already been approved by the European Union, the Australian Treasurer, the Australian Foreign Investment Review Board and the Australian Consumer and Competition Commission.
The Australian Securities and Investments Commission (ASIC) will attend the court hearing. The commission is looking into reports of massive share splitting. The practice of share splitting entails breaking up one large parcel into several smaller parcels registered to different owners who have agreed to vote in a predetermined way.
If the deal goes through, cheques will be sent to M.I.M. shareholders in late June.
Xstrata plans to finance a portion of the acquisition via an underwritten rights issue worth US$1.4 billion; the balance will be funded by bank debt.
M.I.M., Australia’s fifth-largest exporter of coal, has 75% interests in each of the Oaky Creek, Newlands and Collinsville operations in central Queensland. It also produces coal at its Bowen Coke mine, and has two projects at the feasibility and prefeasibility stages: Rolleston and Wandoan, respectively. The Queensland government recently granted M.I.M. a mining lease at the Rolleston open-pit thermal coal mine.
M.I.M. also produces copper, gold, zinc, lead and silver at operations in Australia, the United Kingdom, Germany and Argentina. The company has a half-interest in the Bajo de la Alumbrera gold-copper operation in Argentina.
Xstrata has interests in 14 Australian and 14 South African coal businesses. The company’s zinc business comprises a mining and smelting operation in Spain and a zinc smelter in Germany. The company also owns chrome and vanadium operations in South Africa and Australia.
Xstrata is 40%-owned by Swiss commodity trader Glencore International.
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