Thursday, 2 August 2012

SouthGobi says Ivanhoe mines, Chalco extend takeover bid 30 days

SouthGobi Resources (TSE:SGQ) Thursday reported Ivanhoe Mines (TSE:IVN) and Aluminum Corp of China Ltd., also known as Chalco, both agreed to extend their friendly takeover bid of the Mongolian coal producer.

Chalco, the Chinese aluminum giant, will extend the time for it to make a proportional takeover offer  for up to 60 per cent of SouthGobi stock by another 30 days.

This is the second time Chalco has extended its takeover bid. Chalco will now make a takeover bid on September 4, instead of August 3.

The proposed deal valued at $926 million, or $8.48 per share, also has the backing of Ivanhoe Mines, which is SouthGobi’s largest shareholder.

Ivanhoe has entered into a lock-up agreement with Chalco and has agreed to tender all SouthGobi shares to Chalco.
Mongolia has profited from selling coal, copper and other minerals to China's booming economy but some in the thinly populated North Asian nation are uneasy about possible economic domination by their giant neighbour.

Chalco's plan to buy a 60 per cent stake in SouthGobi from Ivanhoe triggered anxiety in Mongolia about Chinese ownership of a major resource producer.

The deal remains subject to all statutory and regulatory approvals, including Canadian and Chinese regulatory approvals, and Chalco shareholder approval.

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