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'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.
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