The BC Iron (ASX: BCI) board has unanimously recommended the A$3.30 cash takeover offer from the Hong Kong listed Regent Pacific Group (HKG: 0575).
The BC Iron board supports the deal based on some strong enterprise value metrics, such as the resource tonne multiple of A$11.41/t, 83% higher than the peer median of A$7.3/t.
The offer price is an 18% premium to the one month weighted average of BC Iron's shares, and a 4% premium to the closing price of A$3.17 on the day the shares were placed in a trading halt following receipt of the offer.
Regent Pacific already owns 19.9% of BC Iron, with the takeover to be funded from existing cash reserves and a loan from Standard Chartered Bank (Hong Kong).
BC Iron is an iron ore development and mining company with key assets in the Pilbara.
The company’s core asset is the Nullagine Iron Ore Project, a 50/50 joint venture with Fortescue Metals Group (ASX: FMG).
Regent Pacific is a limited liability company incorporated under the laws of the Cayman Islands, and operates as a diversified mining group focused primarily on the Asian region.
Its principal assets are located in Yunnan Province and Inner Mongolia, China.