A bidding war has started for Western Australian iron ore junior Polaris Metals after a last minute takeover bid from Singapore-based Lion Asia Resources.
After Polaris directors this week recommended accepting an all-share offer from Perth-based Mineral Resources first made last month, Lion Asia yesterday launched a $105 million bid for the iron ore hopeful.
Recommendation of Metals Resources’ offer was made conditional upon the absence of a superior offer, which the Lion Asia deal may represent.
Lion Asia has offered Polaris a price of $0.60 per share, which it says represents a 100% premium to Polaris’ last traded share price of $0.30, as well as a 19% premium on the implied value of Minerals Resources’ bid.
“Lion’s cash offer for Polaris is compelling and represents a significant premium to the scrip bid made by Mineral Resources,” chairman of Lion Asia William Cheng Heng Jem said in a statement.
“I believe that the Lion offer represents outstanding value for Polaris shareholders and provides an excellent opportunity for shareholders to realise immediate and certain value from their investment in Polaris.”
Polaris said it is currently weighing the two offers before it makes a decision, noting Lion Asia’s offer is conditional on approval of the Foreign Investment Review Board.