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In the spotlight - Felix resources ( flx)

Felix Resources (FLX)

up 3.8% to 1740c after the government approved Yanzhou’s $3.54bn takeover.

In a new requirement, Yanzhou will have to refloat 30% of Felix on the market by the end of 2012. Good news for those seeking approval for China deals.

Assistant Treasurer, Nick Sherry, has approved Yanzhou Coal's $A3.5bn takeover of Felix Resources. Under the deal, Yanzhou must float a minimum of 30% of its Australian assets, including Felix, by late 2012, and it also has to reduce its holding in underlying mining assets to less than 50%. A spokesperson for Sherry said foreign investment decisions will continue to be assessed on a case-by-case basis.

yanzhou coal felix resources

'Yanzhou's commitment to Felix and the Australian economy is widely acknowledged and appreciated by Felix,' managing director Brian Flannery said on Monday in a statement.

The immediate impact is likely to be in trading for Felix Resources, Aquila Resources and Nufarm. Investors in all three companies have been on edge since last month when FIRB made public its preference for Chinese state-owned companies to hold less than 50 per cent of project developers and 15 per cent of major producers in the sector

Hedge funds and others investing in takeover targets have been very nervous of late, as have bankers that depend on China for deals in the sector. Therefore, share prices of existing and likely Chinese investment targets should be on the rise today.

Felix had been trading at $16.75 - below the offer price of $18 - before the FIRB decision was announced after the market closed on Friday.

Links:

FOREIGN INVESTMENT DECISION – FELIX RESOURCES

Other News:

  • PanAust (PNA) cut its 2H earnings guidance due to lower expected production, currency issues and one off maintenance costs. It now expects between $US75m-$US85m compared to $US85m-$100m. PNA down 1c to 51c.
  • Street Talksuggests a rights issue might be on the cards for Macquarie Media(MMG) and that AGL Energy (AGK) could also raise between $500m and $1bn for acquisitions. MMG down 4c to 249c and AGK down 4c to 1431c.
  • The AFR was on the money this morning when it reported that Rex Minerals (RXM) would raise just over $40m through a rights issue to fund expansion at its Hillside copper discovery. It will undertake a 3-for-10 rights offer priced at 170c a share or a 16.7% discount to its last closing price of 204c.
  • Indophil Resources (IRN) up 4.5c to 101c after announcing it was in discussions with a number of interested parties showing “considerable interest” in acquiring its stake in the Tampaken project in the Philippines.
  • Gold explorer Sumatra Copper & Gold (SUM) lists on the market, 4c higher than its issue price. It raised $12m by issuing 60m shares at 20c. It has majority stakes in four projects in the Indonesian island of Sumatra.
  • Stocks hitting fresh yearly highs: AV Jennings (AVJ), JB Hi-Fi (JBH), Tox Free Solutions (TOX) and Troy Resources (TRY).

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