Sundance Resources Ltd., subject of an agreed takeover from Sichuan Hanlong Group, is seeking information from the Chinese company after a report by Shanghai Securities News that Chairman Liu Han was detained by police.
“Until we get an explanation, I’m a bit concerned,” George Jones, chairman of the Perth-based company said today by telephone. The two companies are scheduled to meet in the Western Australian capital later this week, he said.
Liu and his ex-wife were in Beijing during the National Party Congress this month and were detained after it ended, according to the report, which cited unidentified people familiar with the matter. Hanlong, which owns about 14 percent of Sundance and plans to buy the rest for A$1.14 billion ($1.18 billion), is an investor in highways and power projects.
A woman, who identified herself only as Li and declined to disclose her title at Hanlong’s headquarters in Sichuan, said Liu is traveling on business and can’t speak to the media.
The Securities News report didn’t cite a reason for Liu’s detention.
Hanlong hasn’t finalized its discussions with potential Chinese partners to complete the acquisition, as required by China’s National Development and Reform Commission, Sundance said today in a statement. As such, it’s unlikely that Hanlong will meet a March 26 deadline to produce a credit-approved term sheet, according to the statement.
“Hanlong has indicated to us that they want to meet us and carry on discussion to try to complete the deal,” Jones said by telephone.
Sundance shares were halted yesterday after the Australian Financial Review reported expectations, without citing anyone, that Hanlong may seek a further extension to the bid because it wouldn’t be able to meet the March 26 deadline. The newspaper later reported that Liu postponed a meeting with Sundance earlier this week, without citing anyone. The shares last traded in Sydney at 21 cents, below Hanlong’s offer of 45 cents a share.
In the absence of an extension to the deadline, a failure to provide the term sheet would trigger a consultation period of five business days, to be followed by 10 business days during which Sundance or Hanlong can terminate the agreement, Sundance said in its statement, adding that it expects the matter to be resolved in the week ending April 5.
Hanlong hasn’t sought to change its offer price and Sundance remains in discussions with other parties, the company said.