Chinese bid failure sends Sundance shares crashing

AFP, SYDNEY

Wed, Apr 10, 2013 - Page 15

Shareholders in Australian iron ore company Sundance Resources saw their investment halved yesterday after a billion-dollar takeover agreement with China’s Hanlong Group (漢龍) collapsed.

Sundance terminated the prolonged A$1.3 billion (US$1.35 billion) deal after almost two years of negotiations when it became apparent that Hanlong could not meet funding conditions.

No reason was given for the privately-owned company missing a deadline to provide information on how it would finance the deal, which would have allowed it to acquire all of Sundance’s issued share capital.

However, Chinese media last week reported that Hanlong’s chairman Liu Han (劉漢) was being held by police on suspicion of harboring his brother, who has been charged with murder.

The Web site of the Economic Daily newspaper also quoted sources as saying Liu was suspected of laundering money through casinos in Macau.

The bid was also marred by allegations of insider trading.

The Africa-focused Sundance said discussions were now under way with other parties as part of an ongoing strategy to develop its Mbalam-Nabeba iron ore project.

“Sundance believes that it continues to receive support from the governments of Cameroon and [the Democratic] Republic of Congo [the] and from China for this project,” Sundance chairman George Jones said in a statement.

“The Mbalam-Nabeba project has been globally recognized as an excellent asset, which is financially robust and will unlock a new world class iron ore region in Africa,” he said. “We are confident that we can find a suitable partner to help us bring this project into production.”

Despite the fighting words, Sundance shares slumped when a trading halt was lifted yesterday morning, halving to under A$0.10 before recovering slightly to end 47.6 percent lower at A$0.11.

Ahead of the trading halt, shares were worth A$0.21, down almost by half since December last year.

Hanlong is a diversified company with interests ranging from tourism to minerals and assets of more than 20 billion yuan (US$3.2 billion), its Web site says.