LONDON (ShareCast) - Long time bid target Xstrata turned predator as the miner launched an unwelcome bid for Australia-based miner Indophil Resources.

Xstrata subsidiary Xstrata Copper is offering A$1 in cash per Indophil share in a deal that values Indophil at A$426m (£204.6m).

Xstrata said the bid terms represent a 28% close to the closing price of Indophil on the day before the bid announcement.

Indophil’s largest shareholder, Lion Selection, has agreed to accept Xstrata’s offer in respect of its 17.76% holding, thus giving Xstrata control, in conjunction with its own holding in Indophil, of 19.99% of Indophil’s shares.

The jewel in Indophil’s crown is its 34.23% interest in the Tampakan copper project in the southern Philippines; it also has the option to acquire a further 3.27% in the project.

The holder of the Tampakan project is Sagittarius Mines, in which Xstrata Copper holds a 62.5% stake. The proposed takeover of Indophil thus offers Xstrata the opportunity to assume total ownership of Sagittarius Mines.

The offer is subject to regulatory approval and Xstrata obtaining a relevant interest in 90% of Indophil's shares and Indophil's securities convertible into shares.

“This offer represents a highly attractive premium to Indophil's current share price and gives its shareholders an immediate opportunity to realise a cash value for their investment without the risks inherent in developing a project of this scale,” said Xstrata Copper’s chief executive, Charlie Sartain.

Indophil’s management took a contrary view, describing the bid as “opportunistic”.

Indophil rejected the approach saying the offer terms undervalued the company.

• News Channel