Hindalco to sell Australian unit to Metals X

Hindalco Industries, an Aditya Birla group company, has decided to sell its Australian subsidiary Aditya Birla Minerals (ABML) by accepting the takeover bid of Metals X, a diversified resource company producing gold, tin and nickel.

In its revised offer, Metals X will acquire 4.5 ABML shares by issuing one share of its own and further pay Australian $0.8 in cash for every ABML share held by the promoters.

Hindalco owns 51 per cent in the Australian Securities Exchange-listed subsidiary. The deal values Aditya Birla Minerals shares at 32.9 cent each.

The additional cash component is supported by a specific purpose loan of $25 million which is extended by Citibank, said Metals X.

Metals X has been eyeing ABML for the last one year. Last May, the company offered one share of its own for every five Aditya Birla Minerals shares, valuing the takeover target’s shares at 24.7 cents each.

In December, it increased the offer to one share of its own for every 4.75 ABML shares held.

On Monday, the offer was sweetened by offering one share of its own for every 4.5 shares of held along with the cash component.

ABML shares were up 18 per cent to 0.30 cents on ASE. Metals X already owns 29.77 per cent stake in ABML and its holding will increase to 80.77 per cent after the deal is executed by July 29. Neel Patnaik, Managing Director, Aditya Birla Minerals, said having concluded the strategic review process the Aditya Birla Minerals’ board believes that the increased offer, if it becomes available, would represent a superior outcome for Aditya Birla Minerals’ shareholders.

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