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PrintIndophil Mining Ltd has agreed to terms for a takeover offer from China's largest listed gold company Zijin Mining Group Company Limited worth $545 million.
Zijin, also China's third largest copper producer, will make a cash offer of $1.28 cash per share, an 18 per cent premium to Indophil's last closing share price.
The offer represents an 83 per cent premium to Indophil’s six-month volume weighted average price of 70 cents.
Indophil’s directors have unanimously recommended shareholders accept the off-market offer, which will be subject to certain conditions including a 90 per cent minimum acceptance and regulatory approvals.
Indophil chairman Brian Phillips said the transaction unlocks value for Indophil’s shareholders from the company’s minority ownership position in the Tampakan copper-gold project.
“The Zijin proposal recognises Tampakan’s inherent value and follows a comprehensive ownership review process in which the board, management and advisers have considered a range of strategic alternatives and proposals from interested parties," he said.
“It is also a positive outcome for the project and the people of the Philippines - Zijin is well positioned to fund its share of Tampakan's capital expenditure estimate of $US5.2 billion ($A5.68 billion)," Mr Phillips said.
Zijin has agreed to buy the 19.99 per cent stake in Indophil owned by Xstrata .
Indophil has a 34.23 percent stake in the $5.2 billion Tampakan copper and gold project in southern Philippines, which Xstrata controls.
Evans and Partners analyst Cathy Moises said it appeared a good deal for Indophil shareholders.
"It is not something out of the blue. They (Indophil) have been trying to sell this quite publicly," Ms Moises said.
Last year Indophil defended itself against a bid by Swiss mining giant Xstrata, saying it could get a better offer, she noted.
Xstrata owns 62.5 per cent of the Tampakan project via its subsidiary Sagittarius Mines Inc.
Xstrata, which holds 19.9 per cent of Indophil, has effectively ended its hopes of wholly owning Tampakan, after agreeing to sell its stake in Indophil to Zijin.
Xstrata chief Charlie Sartain said in a statement that he welcomed the introduction of a joint venture partner with the capacity to support the advancement of Tampakan.
On Tuesday Indophil emerged from a trading halt at 1100 AEDT and its shares jumped in value, hitting as high as $1.22 per share before easing.
It is anticipated that Zijin's bidder's statement will be lodged by December 18.
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