Aditya Birla Group’s Hindalco Industries Ltd on Tuesday said it has agreed to accept the Australian miner Metals X's improved takeover offer for its copper mining subsidiary Aditya Birla Minerals Ltd.
The new offer comprises one Metals X share for every four-and-a-half shares of Aditya Birla Minerals and adds a cash component of $0.08 per Aditya Birla Minerals' share, Hindalco said in a statement filed with the stock exchanges.
The additional cash component is supported by a specific purpose loan facility worth $25 million, which is in place with Metals X's banker Citibank, the company said.
"The increased offer equates to $0.329 per Aditya Birla Minerals’ shares based on the closing price of Metals X shares on April 20. This compares to an Aditya Birla Minerals’ share price of $0.250 at the close of trading on April 20," it said.
Metals X has extended the offer period to close on July 29, 2016—it was otherwise due to close on April 28. The extension is to allow Hindalco adequate time to obtain the Reserve Bank of India (RBI)'s approval and to ensure Aditya Birla Minerals’ shareholders have time to consider the increased offer.
Metals X's takeover bid for Aditya Birla Minerals, which is listed on the Australian Securities Exchange, has been going for close to a year. In October last year, Metals X's offer comprised one Metals X share for every five shares of Aditya Birla Minerals.
Aditya Birla Minerals, in which Hindalco owns 51% stake, had also appointed Moelis & Company as its financial advisor to assist with a strategic business review.
"Having now concluded the strategic review process, the Aditya Birla Minerals’ board believes that the increased offer, if it becomes available, would represent a superior outcome for Aditya Birla Minerals’ shareholders," said Neel Patnaik, managing director, Aditya Birla Minerals.
In 2015, Aditya Birla Minerals agreed to sell its closed Birla Mt Gordon (BMG) copper mine in Queensland, Australia, to Lighthouse Minerals Holdings Pty. Ltd for around $10.75 million.
Incorporated in 2004, Metals X is engaged in exploring, developing, mining, processing, producing and marketing metal and mineral properties in Australia.
The company operates through three segments: tin projects, nickel projects and gold projects. It explores for tin, gold, nickel, bismuth and precious and base metals, as well as cobalt and copper deposits.