Shares in JSE-listed Metorex climbed by nearly 7% on Tuesday, after the base metals miner a higher competitive offer to the one received from Brazil Vale from Chinese company Jinchuan.
Jinchuan put in a bid of R8.90 for every Metorex share, or R9.1-billion, topping Vale's offer of R7.35 a share, or R7.5-billion.
The offer comes only two weeks before Metorex shareholders were meant to vote on the Vale acquisitions.
Metorex chairperson Rob Still said that the company's board considered the Jinchuan offer to be superior to that of Vale,but that the Brazilian group had an opportunity to match, or improve, the offer before July 15.
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Speaking during a press conference, Jinchuan's Peter Denen said that Vale had been informed of its counter offer, but had not yet responded. "It would be difficult to speculate on whether or not Vale would be impelled to enter a counter bid," he added.
Vale had previously indicated that it was not interested in entering into a bidding war for Metorex.
Jinchuan is China's largest producer of nickel, cobalt and platinum group metals, as well as one of the top three producers of refined copper.
One of the company's focus areas include copper in Africa and with copper smelting and refining capacity already reaching 600 000 t.
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Jinchuan is also in the process of increasing its copper production base in Guangxi province in southern China, which is specifically designed to receive and process imported materials in order to meet the rapidly growing Chinese market demand, Metorex said in a statement.
Metorex has two operating copper mines, including the Chibuluma mine, in Zambia, in which it holds an 85% interest, and Ruashi, in the Democratic Republic of Congo (DRC), in which it holds a 75% interest.
It has three projects in the DRC, one in a development phase and two in the exploration phase.
Jinchuan already has a regional office in Johannesburg to support its operational efforts in Africa. Jinchuan mergers and acquisition vice-president Sanlin Zhang pointed out that if the Metorex deal went through, it would be the company's second transaction in South Africa. Grinding Mill
Last year, the group also acquired a 45% interest in the South African platinum group metals company Wesizwe. Zhang believed that the group had both a technological and financial advantage over other potential competitive bidders.
Metorex shares climbed as high as R8.60 on the news of Jinchuan's offer, from Monday's closing price of R8.04 a share.
"This offer is a compelling opportunity for Metorex shareholders to realise value for their investment," said Zhang.
If the transaction goes ahead, Metorex would be delisted from the JSE, and would essentially then an unlisted company as Jinchuan is not listed.
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