Mechel
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27 March 2008 г. | 11:33
Mechel to wrap up acquisition of Oriel Resources
In all likelihood, Mechel will consolidate another asset before long – the BoD of Оriel Resources has recommended that the company’s shareholders approve the Russian holding’s buyout offer worth $2.20 (around £1.10) per share.
Mechel Group has made a formal buyout offer to shareholders of Oriel Resources at the per-share price of $2.20 (around £1.10). Oriel’s aggregate valuation, including total shares outstanding and an additional stock offering amounts to $1.5 bln (£749 mn). Oriel’s board recommended that the shareholders approve the transaction.
Mechel’s offer corresponds to a 13.7% premium to the closing price as of February 29 when the Russian group announced plans to take over the company and a 90.2% premium to the average market price for the period from September 2007 to February 2008. Oriel closed at £1.06 per share on LSE March 25, or 4% higher than Mechel’s buyout price.
Mechel will pay for Oriel shares in cash in US dollars based on the $2/£1 rate, which corresponds to a share price of £1.10.
To date, the shareholders that own a total of 46.6% of Oriel have given their approval to Mechel’s buyout offer. What’s more, these obligations remain in effect even in the event of a competitive buyout offer. In addition, Mechel’s acquisition is subject to approval by the regulatory authorities of Russia and Kazakhstan.
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