Sydney, Australia — 25 October 2012 – A private equity firm founded by Chinese billionaire Yu Yong has gone hostile with a US$850 million takeover bid for Australia’s Discovery Metals Limited “’ the company which has just opened a copper mine and production facility in Botswana. The Discovery Board rebuffed a similar offer earlier this month.

Reuters reports that CF Investments, 75% owned by Yu’s Cathay Fortune and 25% by China-African Development Fund, offered A$1.70 compared with Discovery’s last closing price of A$1.65. Discovery traded at A$1.45 before the initial offer was made public.

The takeover offer for Discovery is the latest in a series of small to mid-sized metals and mining deals to hit Asia in the wake of sliding commodity prices.

And China, which accounts for nearly 40% of global copper consumption, has been on the prowl for mining investments in Africa, South America and central Asia as it looks to feed ever expanding domestic demand for key commodities.

Discovery rejected the offer, calling it undervalued. The rejection came as a surprise, as the company’s shares have traded below the offer price, reflecting the view that investors had expected the deal to go ahead.

The transaction, which would require a minimum 51% acceptance to go ahead, follows a string of Chinese acquisitions in the region.

Earlier this year, China-Africa Development Fund and China Guangdong Nuclear Power Corp agreed to buy Kalahari Minerals and Extract Resources for about US$2.3 billion, giving them control of the Husab uranium project in Namibia.

State-owned China National Gold is also considering a bid for the African unit of Barrick Gold, the world’s No. 1 producer.

Of late, China has seen switching away from Australia and Canada as asset prices became more expensive. Long project approval processes have also put off some Chinese investors, spurring the search for assets in emerging markets instead.

Source: Reuters Africa.