Metal X's hostile takeover bid for Aditya Birla Minerals sparks...

Metal X's hostile takeover bid for Aditya Birla Minerals sparks copper fight

Metals X chief executive Peter Cook says its $86 million hostile takeover offer for copper miner Aditya Birla Minerals will be difficult for Aditya's beleaguered board to defend given it is already publicly searching for a buyer.
The one-for-five all-scrip bid Metals X launched for Aditya on Thursday evening was met by a "take-no-action" recommendation from the company's board as it weighs up the offer.
Mr Cook said the hostile bid was designed to "crystallise" a response from the Aditya board and its majority shareholder, India's Hindalco Industries, after receiving no response to a number of friendly approaches from as early as May.
Hindalco is one of the biggest producers of primary aluminium in Asia and owns 51 per cent of the locally listed miner.

"In a corporate takeover the only way to crystallise people to get down to a decision point, is to say, 'here's the offer, you decide'," Mr Cook told Fairfax Media.
"We have put our neck out. We have bid a very fair market premium to where it has traded and so I don't know how the board of that company defends itself when its only recent action has been to say it is going to sell all its assets. It puts them in an interesting position."
Earlier this month, Aditya appointed Moelis as financial adviser to assist with a strategic review, including the potential sale of the company. It came just weeks after Aditya signed an agreement to sell its Mt Gordon project in Queensland, leaving the Nifty copper miner in Western Australia as Aditya's sole remaining producing asset.
The Metals X offer presented about a 60 per cent premium to the Aditya share price of 17¢ on Thursday, prior to the announcement, valuing Aditya scrip at about 24.7¢. Shares in Aditya have surged since, closing on Friday at 23.5¢.


Aditya said Friday it would update investors on its decision in due course but highlighted the bid was "subject to numerous conditions, including a 90 per cent minimum acceptance condition".
Patersons Securities analyst Matthew Trivett said the fact Aditya was considering the offer implied "there may be some chance that Hindalco would accept the offer" but expected Metals X might need to make a better offer "that reflects more value for its copper production, development and exploration assets".
Mr Cook said Metals X, which embarked on an acquisition spree earlier this year, was known as being "a fairly aggressive and fast-moving acquirer of assets" and it was reluctant to be drawn into a lengthy battle for the company.
"That would have an adverse impact on the company doing other things so we are not going to sit around," he said.

The offer's success sits with Hindalco but Mr Cook said he believed it presented an appealing option for minority shareholders in Aditya, many of which have publicly voiced their concerns about the company.
At Aditya's annual meeting in August, the board faced severe criticism about the company's financial performance, operational success and management, including its perceived lack of independence from Hindalco.
Members of Metals X's corporate adviser Xavier Group are familiar with Nifty and Aditya Birla, having worked at Straits Resources when it sold the mine to Aditya in 2003.