Sept. 18 (Bloomberg) -- Meijin Energy Group Co., China’s largest private coke producer, offered A$435 million ($454 million) for Western Desert Resources Ltd., driving the Australian company’s stock to its highest in three months.
The cash bid by the Qingxu, Shanxi-based producer at A$1.08 a share represents a 50 percent premium to its 30-day share price average, Western Desert said today in a statement. The offer is 26 percent higher than its closing price of 85.5 Australian cents on Sept. 14.
Acquiring Western Desert would give Meijin iron ore, gold, copper and uranium deposits that the Adelaide, South Australia-based company explores in the Northern Territory. Western Desert climbed 11 percent to 94.5 Australian cents, its highest close since Jun 20.
Meijin Energy has a capacity to produce 6.3 million tons a year of coke according to its website. Coke is produced from metallurgical coal and used for steelmaking. Its operations span coal mining, coke production and steelmaking with branches in Beijing, Shanghai, Tianjin, Tangshan and Northern East China, Western Desert said. Meijin’s Australian unit, MacMines, is developing the 4.2 billion ton Galilee Basin coal deposit in Queensland state, it said.
“This offer from a major Chinese corporation represents excellent value for shareholders,” Western Desert Chairman Rick Allert said in today’s statement.
The board of directors will appoint an independent expert to assess Meijin’s proposal before recommending that shareholders accept the offer in the absence of a higher bid, the company said. It needs government and regulatory approvals in both countries.
To contact the reporter on this story: Soraya Permatasari in Melbourne at email@example.com