Alumina shares jump as board agrees to takeover by Alcoa
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The news: Shares in Alumina Limited have jumped after the mining investor on Tuesday sealed a takeover proposal from US aluminium giant and joint venture partner Alcoa.
The numbers: Under the $3.4 billion deal, Alumina shareholders will get 0.02854 Alcoa shares for each share held, a 19.5% premium to the average exchange ratio over the last 12 months.
Alumina shareholders will own 31.6% of the combined group. Alumina shares were up nearly 8% to $7.27 in early trading on the ASX.
The ASX-listed Alumina holds a 40% stake in its Alcoa World Alumina and Chemicals (AWAC) joint venture with Alcoa. The JV operates three refineries in WA, including the Kwinana plant has a 2.2 million metric tonne capacity and accounts for about 1.2% of global output of the raw material.
The context: Alumina said its managing director and independent non-executive directors had recommended voting in favour of the deal, in the absence of a superior proposal.
Alumina said the deal would simplify the corporate structure of the AWAC business, enable more efficient funding and provide shareholders exposure to a more geographically diversified portfolio.
Alcoa has agreed to establish a foreign exempt listing on the ASX, enabling Alumina shareholders to trade shares of Alcoa common stock via CHESS depository interests, and will also appoint two existing Alumina directors who are Australian residents or citizens to the Alcoa board of directors, on implementation.
The source: ASX announcement
