Johannesburg, South Africa — MININGREVIEW.COM — 06 July 2011 – Vale SA “’ the world’s largest iron-ore producer, “’ may raise its bid for South African-based and JSE-listed Metorex Limited, in the wake an offer by Jinchuan Group Company “’ China’s biggest nickel producer “’ of US$1.36 billion to acquire the base metals company.
Miningmx reported yesterday that Jinchuan had offered US$1.32 for each share of Metorex “’ 21% more than Vale’s bid in April. Rio de Janeiro-based Vale has until 15 July to match or beat Jinchuan’s offer, Metorex said.
Analysts said the offer appeared to value Metorex fairly. Jinchuan said in a separate statement that Metorex had deemed its offer superior.
Reuters reports that the battle for the South African-listed copper and cobalt producer is the latest saga in the scramble for African resources by emerging market giants China and Brazil, which have an insatiable appetite for raw materials to fuel their growth. It had almost come down to the wire as Metorex shareholders were set to vote on the Vale offer later this month.
“Vale may decide to increase its bid for Metorex because the price is small compared with the Brazilian company’s market value and cash generation,” said Leonardo Brito, an equity analyst in Rio for hedge fund Teorica Investimentos.
“There’s room for Vale to come back with a better price, but that would depend on how bullish they are on the outlook for copper,” said Stephen Meintjes, head of research at Imara SP Reid in Johannesburg. “Jinchuan must have a very clear idea of where copper prices are heading.”
Vale won’t engage in a “bidding war,” chief financial officer Guilherme Cavalcanti said in an interview before the announcement.
Metorex said it had not approved any agreement in relation to the Jinchuan offer. However, the companies said in a joint statement that the Jinchuan offer already had the firm backing of shareholders.