Chinese firm offers $160 mln for Turquoise Hill's Inova
MELBOURNE Aug 21 (Reuters) - A private Chinese coal company said it plans to launch a $160 million offer for Inova Resources Ltd, offering a 29 percent premium for the Australian copper and gold miner controlled by Rio Tinto's Turquoise Hill Resources.
Shanxi Donghui Coal Coking & Chemicals Group said on Wednesday it had secured a 14.9 percent stake from Turquoise Hill, which has promised to sell all its shares once Shanxi's offer is accepted by shareholders representing 51 percent of the company.
Turquoise Hill, majority-owned by Rio Tinto Ltd , owns 56.2 percent of Inova Resources and has been reviewing asset sales or a sale of its stake for more than a year.
The deal would shore up Turquoise Hill's funding as it faces a Dec. 31 deadline to repay up to $2.4 billion in debt to Rio Tinto, which has been funding Turquoise Hill's costs at its biggest asset, the Oyu Tolgoi copper and gold mine in Mongolia.
Under a recent deal with Rio, Turquoise Hill has agreed to sell new shares at a massive discount to cover any shortfall in its debt repayment.
Shanxi Donghui, owned by two brothers, offered 22 cents a share for Inova, compared with its last trade at 17 cents. The stock has lost two-thirds of its value this year.
The coking coal, coke and chemicals producer said it would fund the deal from its cash holdings of more than 1 billion yuan ($163.28 million).
"Shanxi Donghui's offer provides Inova shareholders with certainty of value at an attractive, risk-free, cash premium for their investment," the Chinese firm said.
Inova owns the Osborne copper and gold mine, the Mount Elliott copper and gold project and the Merlin molybdenum and rhenium deposit, all in the state of Queensland.
- NOAA employee charged with stealing U.S. dam information
- Autopsy of slain Missouri teen shows close-range gunshot: report
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- Hong Kong protesters march after fruitless talks with government
- Sweden gets two new sightings, as hunt for undersea intruder goes on