MinRes rules out rival IOH bid

Mineral Resources boss Chris Ellison. Picture: Simon Santi/The West Australian.

Mineral Resources boss Chris Ellison yesterday ruled out a bid for Iron Ore Holdings, saying the company supported BC Iron's $250 million cash and scrip offer for the Kerry Stokes-backed junior.

MinRes made a last-ditch bid in June to spoil Baosteel and Aurizon's takeover of Aquila Resources, with a raid on Aquila's share register as the $3.40-a-share offer gathered pace. It followed it up with a failed $3.75-a-share all- scrip merger bid with Aquila.

Mr Ellison said there would be no tilt for IOH, saying MinRes had strong relationships with both companies and was "very supportive" of the takeover.

He said MinRes' main interest in the region was tied to the construction of port, road and mine infrastructure at IOH's West Pilbara Buckland project and the proposed Cape Preston East port. MinRes had bought a number of IOH's East Pilbara tenements over the past two years and is about to launch exports from IOH's Iron Valley project.

On Monday, IOH managing director Alwyn Vorster said MinRes would offer an "attractive option" to build Buckland's infrastructure.

Monday's friendly BCI bid for IOH has heightened interest in the West Pilbara but any other rival bidder for the junior will be on a tight timeline to prepare an alternative offer.

IOH's majority shareholder, Kerry Stokes' Australian Capital Equity, has agreed to sell into the BCI offer within 14 days of its formal opening - around August 22, according to the timeline outlined in the merger announcement - unless a superior proposal emerges. That gives rival bidders until September 11 to deliver an alternative bid.

It is understood the tie-up caught the new management at Aquila Resources - the other potential alternative to BCI - by surprise. It is understood Aquila's new owners are nearing completion of a review of the company's West Pilbara project and are now seeking to engage with iron ore juniors in the region to pitch their case for use of the Anketell port and rail project.

That process was interrupted by the BCI bid for IOH, sources say. The IOH board agreed to "no shop, no talk" clauses in the merger deed, leaving Baosteel and Aurizon with little option but to either wait out the merger or quickly prepare a superior proposal in the hope of winning control of IOH.

IOH shares closed down 1.5¢ to $1.31 yesterday, with BCI down 2¢ to $2.97.

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