September 13, 2012 / 1:41 AM / 7 years ago

Singapore fund offers fat premium for Australian resources fund

MELBOURNE, Sept 13 (Reuters) - Singapore-based IMC Resources Holdings has offered a 39 percent premium to buy out Australia’s Linq Resources Fund for A$106 million, in a sign that Asian investors have faith in a rebound in Australia’s faded mining boom.

IMC Resources, part of a family-owned business mostly involved in shipping, is already Linq’s biggest shareholder with a 17.5 percent stake and has offered A$0.70 a share in cash to buy the remaining shares in the group.

While that is a big premium to Linq’s last trade at A$0.505, it is 26 percent below Linq’s net tangible asset value as of June 30. Its shares have been battered as miners’ shares have tumbled on global growth worries.

“The offer provides all unit holders with the opportunity to sell their entire holding in the Fund at an attractive price, and in a timely manner, which we consider to be particularly attractive given the prevailing challenging equity market conditions,” Linq Resources Fund chairman Bruno Camarri said in a statement.

Linq shares jumped 34 percent to A$0.675, reflecting investors’ view that the deal is likely to go ahead.

The fund said IMC’s bid was a better option than its plan to de-list from the stock exchange, which had been set for a vote on September 17 as Linq looked for ways to close the gap between the value of the fund’s assets and the fund’s share price.

Linq’s top investments as of June 30 were Brazil’s Ferrous Resources and Australia’s Atlas Iron, gold miners Newcrest Mining and Millennium Minerals, and copper explorer Zambezi Resources.

IMC is being advised by Macquarie Capital. Linq is being advised by Gresham Advisory Partners.

Reporting by Sonali Paul; Editing by Michael Perry

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