Xstrata agrees to purchase 17.83% stake in Indophil
Source: 06-SEP-2008 Intellasia | Bloomberg
Sep 6, 2008 - 7:00:00 AM Xstrata Plc, the world's fourth-largest copper producer, agreed to increase its stake in Indophil Resources NL to 19.99%, after dropping a takeover bid.

The acquisition of the 17.83% stake for A$1.17 a share, or A$82 million (US$67 million), from Lion Selection Ltd follows the expiry of Xstrata's A$1.28-a-share offer for Indophil, the Zug, Switzerland-based company said today in an e-mailed statement.

Indophil and Xstrata are planning a US$3 billion mine at the Tampakan site, one of southeast Asia's largest untapped copper deposits. Xstrata abandoned its A$545 million bid for Indophil August 21, yielding to a management buyout group that sweetened its rival offer the previous day.

"Xstrata's position as a significant shareholder in Indophil provides us with greater influence over the future ownership of our partner in the Tampakan project,'' Charlie Sartain, Xstrata Copper chief executive, said in the statement. Xstrata "has no current intention'' of making a further offer for the remaining Indophil shares, it said.

Indophil shares fell 36% to 76 cents on the Australia exchange exchange at 10:45 a.m. Sydney time.

Xstrata had offered A$1.28 a share for Indophil, while Stanhill Resources Pty, led by Indophil CEO Richard Laufmann and Hong Kong-based investment bank Crosby Capital Ltd added shares in a proposed minerals exploration company to its bid, which matched Xstrata's.

Lion Selection retains ownership of 26.85 million shares in Indophil, it said in a separate statement to the Australian Stock Exchange.

"Lion considers this transaction to be a better alternative than awaiting the outcome of the conditional Stanhill offer,'' it said in the statement. "This transaction eliminates any uncertainty regarding the realisation of cash for a significant portion of Lion's Indophil shares.''