Xstrata gets court nod (June 23, 2003)

The Supreme Court of Queensland has approved London-listed Xstrata‘s A$4.9-billion cash-and-debt takeover of Aussie miner M.I.M. Holdings.

The court’s decision was late in coming, as it investigated allegations of share splitting. Opponents of the takeover alleged that some 574 shareholders, all holding 375 shares and living at the same address, had been added to M.I.M’s share register in the weeks leading up to a shareholder vote on Xstrata’s offer. The court ruled that even if there had been share splitting, it was not enough to sway the outcome of the vote.

Under the deal, M.I.M. shareholders of record on June 23 will receive A$1.72 for each share tendered. The transaction is slated to take place on June 24, with cheques mailed to shareholders at the same time.

Although M.I.M’s CEO, Vince Gauci is expected to leave the company, Xstrata has already retained two key M.I.M. executives.

Says Xstrata CEO Mick Davis: “The appointment of John Gooding and Charlie Sartain emphasizes our stated intention to utilise, to the fullest extent possible, the skills and experience of M.I.M personnel within the combined group.”

Gooding will assume the reins as chief executive of Xstrata Copper Australia, including the Mount Isa business. Sartain will head up Xstrata Copper Americas, which has a 50% operating interest in the Bajo de la Alumbrera gold-copper mine in Argentina.

Both men were members of M.I.M’s executive committee and will now report directly to Davis.

Xstrata has tapped Ian Cribb, formerly the company’s director of underground coal operations, to lead Brisbane-based Xstrata Coal Queensland (XCQ). XCQ will comprise M.I.M.’s prized coking and thermal coal operations, and, together with Xstrata Coal New South Wales and Xstrata Coal South Africa, will constitute the company’s coal division.

Significant cuts are expected among the 180 people employed at M.I.M’s Brisbane headquarters.

Once the dust settles, Xstrata will become the world’s fourth-largest diversified miner.

M.I.M. shares have ceased trading on the Australian Stock Exchange, and will be delisted following the completion of the takeover.