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Mineral sands merger moves ahead

Mineral sands merger moves ahead

Roger Davies, Ashurst

A global firm has advised Perth-based Iluka Resources Limited on its acquisition of a mineral sands company in Sierra Leone.

Firms: Ashurst (Iluka Resources Limited); Herbert Smith Freehills UK (Sierra Rutile Limited)

Deal: Iluka Resources Limited acquired Sierra Rutile Limited.

Value: $375 million

Area: Regulated M&A

Key players: The Ashurst team was led by partner Roger Davies (pictured) with assistance from Stuart Dullard, Bill Reid and Jamie Ng in Australia, as well as Michael Robins, Nick Williamson and Angela Pearson in London and Ute Zinsmeister in Germany.

Deal significance: Iluka Resources Limited (Iluka), which is headquartered in Perth with a current market capitalisation of approximately $3 billion, is in the business of mineral sands exploration, project development, operations and marketing.

Sierra Rutile Limited (SRL) is a company incorporated in the British Virgin Islands (BVI) and listed on the AIM market of the London Stock Exchange. SRL has significant mineral sands mining operations in Sierra Leone.

Iluka and SRL have announced that they have entered into an implementation agreement pursuant to which Iluka will acquire all of the issued capital of SRL by way of a statutory merger regulated by BVI legislation.

The offer values SRL at £215 million (approximately AU$375 million), representing a 32.3 per cent premium to SRL’s one-month VWAP.

Pursuant to BVI law, the merger requires the approval of a simple majority (more than 50 per cent) of the votes of SRL shareholders to proceed. The acquisition was announced on 1 August 2016, expected to be completed during Q3 2016.

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