Rio Tinto has delivered a takeover offer billionaire Mark Creasy-backed CZR Resources couldn’t refuse.
The binding offer, which totals $75 million, has been put on the table by the Rio Tinto-spearheaded Robe River Iron Associates joint venture (RRJV), as well as Rio subsidiary North Mining and RRJV partner Mitsui & Co subsidiary Mitsui Iron Ore Development.
CZR has declared the offer to be “superior” to the previous winning bid from Jon Welborn-led Fenix Resources, which was in the process of seeking approvals from shareholders to move ahead.
CZR is fully backing the RRJV offer.
“This is more favourable to CZR shareholders than the transaction contemplated by the Fenix takeover offer,” CZR said.
“The consideration of $75 million represents a significant premium to the all-scrip Fenix transaction.”
Fenix will now have the right to match the RRJV offer by April 17. If Fenix provides a counter proposal, the CZR board will review it in good faith to determine whether it will provide more value to shareholders.
The object of desire for these bids is CZR’s Robe Mesa iron ore project in WA that Welborn describes as “one of the last independent large-scale high-quality iron ore development assets in the Pilbara”.
A 2023 pre-feasibility study for Robe Mesa demonstrated strong financial returns on its 45.2 million-tonne iron ore resource base.
Should CZR decide to break away from the Fenix deal, the RRJV has declared it will offer coverage of the $650,000 break fee on top of the $75 million.
