Australia's Gindalbie bids $1.4 bln for Sundance

By James Regan

SYDNEY (Reuters) - Hoping to be the first to tap Cameroon's vast deposits of iron ore, Australia's Gindalbie Metals Ltd (GBG.AX: Quote, Profile, Research, Stock Buzz) offered on Monday A$1.6 billion ($1.4 billion) for West African explorer Sundance Resources Ltd

(SDL.AX: Quote, Profile, Research, Stock Buzz).

The offer of one Gindalbie share for every two Sundance shares would create a company worth A$2.4 billion, adding Sundance's Cameroon iron ore deposits to those held by Gindalbie in Australia.

Iron ore, used to make steel, has become a prized raw material and a successful takeover would be the biggest in the Australian mining industry in 2007, according to data from Dealogic.

"This will give Gindalbie a foothold in a potentially promising part of the world for iron ore at a time when demand is very strong," said D.J. Carmichael analyst James Wilson.

The move drove shares in little-known Sundance as much as 14 percent higher, in part on speculation it could become the latest Australia-listed miner to attract multiple takeover offers.

However, long time iron ore miner George Jones, who is chairman of both Gindalbie and Sundance, has given his blessing to the proposal, as has Sundance's largest shareholder, Australian mining magnate Ken Talbot's Talbot Group Holdings, which has 19.9 percent.

Further repelling additional predators, a non-solicitation agreement bars Sundance from seeking out a higher offer.