Arrium rejects second takeover bid

17/05/2018 Posted by admin

Arrium has rejected a second bid for operations.
Nanjing Night Net

After the market closed yesterday, Arrium received another unsolicited, non-binding and conditional acquisition proposal from consortium of Noble Group Limited, POSCO Australia, National Pension Service of Korea, Korea Investment Corporation and Korea Finance Corporation to acquire all of the shares in the company.

The revised proposal contemplated an acquisition of all the shares in Arrium for an indicative cash price of $0.88 per share by way of a scheme arrangement.

The revised proposal was highly conditional and incorporated virtually all of the conditions which attached to the previous proposal, including the need to undertake due diligence and arrange debt financing.

Arrium’s board and its advisers carefully reviewed the revised proposal.

The board believes the revised proposal significantly undervalued Arrium in the context of a change of control transaction and that the revised proposal was highly conditional.

The consortium still requires to hold discussions with Arrium’s lenders in relation to the refinancing of its existing debt, the terms of which have not been disclosed to Arrium.

This requirement, together with the consortium’s need for weeks of due diligence, creates significant transaction risk.

Arrium chairman Peter Smedley said the board had given consideration to the revised proposal.

“We believe that the revised proposal significantly undervalues Arrium and is not in the best interests of Arrium shareholders,” Mr Smedley said.

“We also believe that the highly conditional nature of the proposal carries significant risk.

“Arrium has an attractive portfolio of businesses including a world class mining consumable business and an iron ore business which is performing well and has very attractive growth options.

“The expansion of our mining operations and port remain on track.

“The revised proposal is opportunistic. It comes as iron ore prices are rising and after we have shipped the first ore from our new mine two weeks ago.

“Arrium’s board remains committed to maximising value for shareholders and will consider all options available to achieve that objective.”

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