Takeover focus turns to Tiger
Tiger Resources has tried to hose down takeover speculation after its biggest shareholder, secretive commodities trading giant Trafigura, orchestrated last week's $1.3 billion takeover of copper neighbour Anvil Mining by Minmetals.
Trafigura, which had been Anvil's biggest shareholder, also owns a 26 per cent Tiger stake worth $76 million.
The London-based trader's decision to offload its 37 per cent stake in Anvil, which, like Tiger, is Perth-based and in pursuit of copper riches in the Democratic Republic of Congo, sparked a global auction that resulted in China's Minmetals $1.3 billion cash bid.
Trafigura is likely to book a fourfold profit on its Anvil investment.
Its decision to exit Anvil has sparked talk the trader needed the cash to meet commitments elsewhere in its sprawling portfolio. Trafigura's last financial accounts reveal that net income in the year to September 2010 was $US751 million, down from $US940 million the year before because of tough trading conditions for oil products.
Anvil's shares, like those of all copper companies including Tiger, had been sold down because of a slump in the global copper price.
There is also a belief that companies with assets in the DRC are trading at substantial market discounts because of the political risks of operating there. Tiger's Kipoi project, which began producing in April, lies in the Katanga copper belt and is about 60km from Anvil's Kinsevere operation. Kinsevere is in the middle of a major capacity ramp-up.
Minmetals' hunger for base metals miners, coupled with Trafigura's position, has thrown the spotlight on Tiger.
Tiger's shares soared 10 per cent to 43.5¢ on Friday on above average trading volumes. Its market capitalisation is $291 million.
Tiger managing director Brad Marwood said yesterday he had not had any contact with Trafigura since the Anvil takeover was announced and had not had any indication that his biggest shareholder was a seller.
"I haven't spoken to either of the directors from Trafigura who are also directors of Tiger and Anvil," Mr Marwood said.
"But it's actually quite the contrary, Trafigura is very keen to see Tiger realise its potential."
Trafigura bought into Tiger at 22.5¢ levels.
The trader's entry into Anvil was at roughly $2.20 a share, compared with Minmetals' $C8 ($7.88) agreed bid.
