Following recent speculation global miner BHP Billiton Ltd
(ASX:BHP) has announced that it has made a takeover offer for United Minerals Corporation NL
(ASX:UMC).
Through its wholly owned subsidiary BHP Billiton Minerals, BHP is offering $1.30 per United Minerals share, valuing the company at $204 million.
BHP says the offer represents a premium of 43 per cent to United Minerals closing price on October 6 of 91 cents.
United Minerals principal asset is the Railway iron ore deposit in the Pilbara of Western Australia.
The offer from BHP is conditional upon a proposed transaction with China Railway Materials Commercial Corp not going ahead.
On September 8 United Minerals announced a proposed transaction with China Railway Materials Commercial Corp, involving a conditional placement to the Chinese investor, and an iron ore offtake agreement.
United Minerals chairman Alan Birchmore says by any measurement this is a great result and it offers all of the company’s shareholders an opportunity to deal away the significant development risks which the company would need to overcome to bring the deposit into production.
BHP’s 2009 net profit took a massive tumble form its high of over US$15 billion in 2008, and United Minerals has posted net losses in the last five years.
