Todd gets nod for Flinders deal
UPDATE 2.30pm: The Foreign Investment Review Board (FIRB) has given New Zealand’s Todd Corporation the all-clear to buy the Pilbara iron ore project from Flinders Mines.
Flinders announced this morning that it had been advised by Todd that FIRB had informed it that it had no objections to the deal announced last month.
Under the terms of the deal, Todd will pay Flinders $10 million for an option to buy the project with an exercise price of $55 million plus an ongoing royalty.
The option agreement is part of a three-way move by Todd to consolidate its interests in the Pilbara.
It has also launched a 30¢ a share bid for Nick Curtis’ Rutila Resources, which wants to build a port and rail project to service Flinders’ 25-million-tonne-a-year iron ore mine in the West Pilbara.
Flinders says its board sees the Todd offer as the “most efficient method of adding value for its shareholders”, given the capital cost of the project and the parlous state of the iron ore sector.
However it is understood a dissident shareholder group - dubbed FMS United and claiming to represent as many as 16 per cent of Flinders voting rights excluding Todd's interest in Flinders - are opposed to the move.
They claim the offer is out of the money and the optional nature of the deal means there is no security for shareholders.
Flinders has appointed Deloitte Corporate Finance to complete an independent expert’s report into the Todd transaction, which will advise whether the deal is both fair and reasonable.
That report and a notice of shareholder meeting to vote on the deal are expected to be released early next month.
Flinders shares closed steady at 1.6 cents.
