Lion steps up Polaris bidding

The Polaris Metals bidding war escalated late last week, with Lion-Asia Resources looking to trump rival bidder Mineral Resources with a revised cash offer of 70 cents per share.

The Polaris Metals bidding war escalated late last week, with Lion-Asia Resources looking to trump rival bidder Mineral Resources with a revised cash offer of 70 cents per share.

The company announced the new offer on Friday evening; only a day after the Polaris directors recommended an improved 65 cents per share offer from Minerals Resources.

Minerals Resources is offering one share for every 12 Polaris shares as well as a cash component of five cents per Polaris share.

In a statement, Lion said the offer represented a 133% premium to Polaris’ 30 cent share price at the close of 14 August 2009, the last day of trading prior to the announcement of the Mineral Resources offer.

According to the company, the offer also equates to an 89% premium to the Stantons International valuation high point of 37 cents per share, as well as a 7% premium to the implied value of the Mineral Resources’ revised offer.

“Lion believes that the revised offer is clearly superior because it provides 70 cents cash per share, compared to the Mineral Resources cash component of five cents per share,” the company said.

“There is significant uncertainty around the inherent value of the scrip component of the Mineral Resources offer, which equates to around 60 cents per share.

“The Lion offer removes the uncertainties associated with the outlook for the iron ore market and gives Polaris shareholders a significant cash premium that rewards them for a change in control.”

Lion chairman Tan Sri William Cheng Heng Jem called on the Polaris board to recommend the company’s offer in favour of Minerals Resources’.

“We believe the substantial increase in our all-cash offer requires the Polaris board to act in the interests of all its shareholders and declare the offer superior to Mineral Resources’ offer,” he said.

“We believe that shareholders want to see a cash offer that properly rewards them for a change in control.”

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