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Sydney (AFP) Aug 27, 2012
Australian iron ore company Sundance Resources said Monday it had accepted a revised takeover offer from China's Hanlong in a deal worth about Aus$1.4 billion (US$1.45 billion).
Sundance said it had accepted Hanlong's proposal to acquire 100 percent of the company for 45 cents per share -- down from the recommended 57 cents offer of 2011 -- due to changes in financial markets.
Shareholders will now determine whether the proposed offer by Chinese suitor Sichuan Hanlong Group will proceed after China's National Development and Reform Commission (NDRC) granted provisional approval earlier this month.
"The board believes that the revised offer is worthy of putting to shareholders in light of several key considerations," Sundance chairman George Jones said.
"These include the requirements expressed in the NDRC provisional approval and the change in financial markets since the original agreement was struck in October 2011."
The requirements in the NDRD approval included a reasonable acquisition price and Hanlong, which already holds about 18 percent of Sundance shares, securing equity and debt funding from relevant banks.
Jones said the company had considered the current Sundance share price, feedback from shareholders, and the opportunity that the revised offer allows Sundance to seek alternative offers, in making its decision.
Shares in Sundance, which were last above 44 cents in mid-May, were trading early Monday at 35 cents.
Sundance said the board had concluded that the revised scheme was "currently in the best interests of shareholders" and recommended the Hanlong proposal in the absence of a better offer.
Hanlong wants Sundance for its Mbalam iron ore project on the border of the Congo and Cameroon in western Africa.
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