Cathay Fortune's Discovery Metals takeover bid turns hostile

CF Investments, 75% owned by Yu's CFC and 25% by the China-African Development Fund (CAD), had offered A$1.70 a share in cash for the remainder of the company that it doesn't already own. This represented a 17% premium to the previous close. The Discovery board dismissed the offer as inadequate.

According to the Financial Times, Yu said the refusal to permit due diligence on "any reasonable basis" had left the CFC and CAD with no choice but to launch a hostile takeover bid. If CFC is successful in its takeover, it would gain control of Discovery's copper-silver mine in western Botswana, which has an annual production capacity of 36,000 metric tons of copper and 1.1 million ounces of silver.

Gordon Galt, Discovery's chairman, sent a letter to shareholders recommending they take no action in response to the Shanghai-based investor's off-market bid. He added that Discovery's board was still of the view that the A$1.70 per share valuation is too low.

Cathay is being advised by Citigroup, while UBS is representing Discovery.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Greater China
• Buyouts
• Buyout
• Industrials
• Africa
• Australia
• China
• buyout