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
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.