Lemur Resources in takeover offer from Bushveld Minerals

Lemur Resources (ASX:LMR) is subject to an all scrip takeover offer from AIM-listed Bushveld Minerals (AIM:BMN) in a bid valuing Lemur at around A$19.10 million.
Under the off-market takeover, Bushveld will offer 3 of its own shares for every 5 Lemur shares, valuing Lemur at A$0.099 per share, based on Bushveld's closing price of GBP0.109 per share on 9 May 2013, representing a premium of 65.5%.
Since Lemur has two of Bushveld's directors on its board, it has formed an Independent Board Committee consisting of Marcello Cardaci and Ryan Rockwood to consider the offer.
It has advised shareholders to take no action until a formal recommendation is made.
Bushveld is in the process of preparing a formal bidder's statement.
Potential synergies
Bushveld is a mineral development company focused on exploring and developing mineral projects on the Bushveld Complex in South Africa, and its primary projects are the Bushveld iron ore project and Mokopane tin project.
Meanwhile, Lemur has the Imaloto Coal Project in Madagascar, where it holds JORC Resource of 135.7 million gross tonnes in situ, of which 68% is Measured and 91% is Measured and Indicated.
Bushveld believes that a successful bid could create a diversified African junior miner with a swathe of mineral assets spread across South Africa and Madagascar.
It will also provide Lemur exposure to Bushveld's iron ore and tin projects that are presently riding the crest of the commodities cycle and have strong forward demand profiles.
Bushveld is of the view that Lemur will also benefit from its quality management team.
Bid conditions
The takeover offer is subject to usual bid conditions including regulatory nod from ASX, ASIC, AIM and the Takeovers Panel; no material adverse effect and no prescribed conditions including dilution of capital by Lemur.
However, the offer is not subject to minimum acceptance condition.
Analysis
While on the face of it the bid appears to represent a considerable premium of 65.5%, the company had a $17.46 million in cash balance at the end of March 2013 quarter.
Bushveld has been advised that certain Lemur shareholders, representing 42% of the issued capital, have indicated their conditional acceptance.


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