BC Iron (BCI) will now mop up the rest of the shares in the Kerry Stokes controlled Iron Ore Holdings (IOH), after moving past 90% on Tuesday night and going unconditional.
The takeover is in effect a backing of BC Iron into Iron Ore holdings with Mr Stokes set to emerge as the largest shareholder.
The $250 million cash and share offer has survived a 20% drop in iron ore prices, and had two time extensions.
The merger will see Mr Stokes own 19% of the merged company once the deal is bedded down.
BC Iron shares were worth $3.31 prior to the deal being announced, but several institutional investors sold down their stakes after the takeover was announced, thanks to concerns the bid could see the company end its current high dividend payout policy.
BC Iron’s shares closed at $1.48 on Tuesday, and at $1.485 yesterday (it survived the big sell-off yesterday).
BCI vs IOH YTD – BC Iron, IOH deal nears end
The merger will mean BC Iron has access to higher quality reserves held by IOH, which will extend its mining life.
BC Iron’s relatively 75% stake in a short life mining/export operations of 6 million tonnes a year in the Pilbara, will add to the longer-life West Pilbara iron ore reserves that Iron Ore Holdings has been developing.
BC Iron managing director Morgan Ball said yesterday he was pleased to see shareholders accept the deal, and he welcomed the Iron Ore Holdings investors into the company.
"We are looking forward to completing the transaction and advancing Iron Ore Holdings’ attractive, long-life assets," he said.
It wouldn’t surprise to see the Stokes interest sell off the 19% stake once the merged company is up and running.
