Gold Valley Iron Ore made an unsolicited bid for CZR Resources yesterday, drawing industry speculation over CZR’s existing takeover underway from Fenix Resources. Now, Rio Tinto has thrown its hat into the ring.
Things are certainly heating up for billionaire Mark Creasy-backed CZR, which announced in February it had entered into a deal to sell to Fenix Resources after a $102 million deal with China-backed Miracle Iron Resources fell through.
Miracle experienced ongoing delays for approval from the Australian Foreign Investment Review Board (FIRB), which was necessary for the deal to enter its final stages.
Jon Welborn-led Fenix stepped in with a $71 million offer, leading CZR to sunset Miracle and begin a transaction process with Fenix.
Now, two more players have joined the board in the form of Gold Valley Iron Ore and participants in the Robe River Iron associate joint venture (JV), which includes various subsidiaries of Rio Tinto, Mitsui & Co, and Nippon Steel Corporation.
Both Gold Valley and the Robe River JV’s offers are unsolicited, confidential, non-binding, indicative and conditional.
CZR said Gold Valley’s proposal is an expression of interest only and does not “constitute a superior proposal” to Fenix’s.
“The non-binding nature of the Gold Valley proposal means there is no certainty that Gold Valley will proceed with a takeover bid on the terms proposed … Gold Valley has also reserved the right to change the structure of the transaction and impose conditions to the transaction,” CZR said.
CZR said it has also reviewed the Robe River JV proposal and determined it has the potential to compete with Fenix’s offer and could be considered a superior option if it moves ahead.
The Robe River JV is currently offering $75 million, as well as coverage of the $650,000 break fee CZR would need to pay to walk away from the Fenix deal.
In the meantime, the CZR board is still officially recommending shareholders accept the Fenix offer.
Fenix must obtain a 75 per cent interest in CZR shares by March 21 7.00pm AEDT to move ahead with its takeover. Currently, it has received acceptances from CZR shareholders for 10 per cent of all shares.
Whether Gold Valley or the Robe River JV will be able to tempt CZR to accept remains to be seen. If Fenix does not manage to obtain the necessary shareholder, CZR may have a bidding war on its hands.
