Hong Kong’s Dingyi to Make Takeover Bid for Elemental Minerals
By Gillian Tan Hong Kong-listed Dingyi Group Investment Ltd. 0508.HK -3.39% is poised to make a binding takeover offer for the shares it doesn’t already own in Australia-and-Canada-listed Elemental Minerals Ltd. ELM.AU -1.09%, a person familiar with the matter said Monday.
Elemental’s key asset is its 93%-owned Sintoukola potash project on the Republic of Congo coastline. The company requested that trading in its shares be halted pending an update on the potential change of control proposal made by Dingyi.
The cash offer of 66 Australian cents (US$0.60) share values Elemental at A$190.5 million, and represents a 45% premium to the stock’s last traded price.
In April, Elemental said it had received an indicative, non-complete proposal subject to due diligence, among other factors. On May 31, both companies said any formal proposal would not be conditional upon financing or Chinese or Australian regulatory approvals.
Potash is used mostly as a fertilizer, but also has a range of industrial uses —Agence France-Presse/Getty Images BMO Capital Markets is advising Elemental while RBC Capital Markets RY -0.07% is advising Dingyi, which already owns 13.7% of Elemental.
In June, Dingyi issued China-Africa Development Fund, a subsidiary of China Development Bank, convertible bonds and warrants worth US$100 million.
The China-Africa Development Fund, or CAD, and partner Cathay Fortune Corp. are among parties in talks with Africa-focused copper explorer Discovery Metals Ltd. DML.AU -3.70% Discovery said Monday that its lenders had waived a requirement to contribute A$30 million of equity, though an event of default will occur if its board hasn’t recommended a bid to acquire the company or agreeed terms with a cornerstone investor by July 31
