Alumina shares jump after takeover offer from Alcoa
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The news: Shares in mining investor Alumina Limited have jumped after a takeover proposal from its joint venture partner US aluminium giant Alcoa looks set to sail through.
The numbers: Alcoa has made an all-scrip bid, offering 0.02854 Alcoa shares for each Alumina share held, valuing the target company at USD2.2 billion ($3.4 billion).
Alumina’s biggest shareholder, Allan Gray Australia, has already backed the deal, entering into an agreement that gives Alcoa the right to acquire up to 19.9% of the company.
Alumina shares were up 6.9% to $1.09 in early trading on the ASX.
The context: Alumina said the offer follows earlier indicative offers and a period of negotiation. Its board said the independent directors as well as managing director Mike Ferraro intend to support the bid subject to an independent expert concluding the transaction is in the best interests of Alumina shareholders and no better offer is available.
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 that has a 2.2 million metric tonne capacity and accounts for about 1.2% of global output of alumina.
The source: ASX announcement
