Meijin Energy Group bids for Western Desert Resources

17 September 2012 (Last Updated September 17th, 2012 18:30)

China-based Meijin Energy Group has made an offer to acquire Australian miner Western Desert Resources for A$435m ($457m).

China-based Meijin Energy Group has made an offer to acquire Australian mining company Western Desert Resources for A$435m ($457m).

Meijin has bid A$1.08 ($1.1) per share, representing a 26% premium to Western Desert's last closing price.

Western Desert chairman Rick Allert said in a statement published today, "This offer from a major Chinese corporation represents excellent value for shareholders."

The company has its mining footprint in base metals, gold, iron ore and uranium, where as Meijin is primarily focused on coal mining, coke production and steel making in China and Australia.

The transaction will require an approval from various agencies such as the Foreign Investment Review Board of Australia, the Chinese Ministry of Commerce, the State Administration of Foreign Exchange in China and the National Development and Reform Commission.

Both parties have agreed a completion date of no later than 31 March 2013, but will endeavour to close the transaction before 24 December 2012.

Western Desert Resources main assets are located in the Northern Territory of Australia and include Roper Bare and Mountain Creek iron projects, and the East Rover gold and copper project.

Meijin chairman Junliang Yao said expressed interest Western Desert's Roper Bar iron ore project.

"This is a great resource and will fit into Meijin's long-term strategy in Australia, and we would like to see the resource developed to be the flagship project of the Northern Territory," he said in a statement.