LONDON (ShareCast) - Cape Lambert Iron Ore fell to its lowest since May after the A$400m sale of its namesake iron ore project got shareholder approval, making a rival bid less likely.
The market had thought steelmaker Evraz, part owned by Russian billionaire and Chelsea football club’s Roman Abramovich, might gatecrash the party.
Today’s vote was the final condition to the sale of the project in the Pilbara region of Western Australia to China Metallurgical Group Corporation (MCC).
Cape will now receive A$240m from MCC at the end of this month, with the majority of the remaining payments to be made in the coming 60 days.
A final payment of A$80m from MCC, which has already paid a deposit of A$10m, will be made on the granting of a mining lease at the project.
Earlier this month, Cape confirmed it met with people from Merrill Lynch and Evraz in Singapore.
The Australian firm stirred up rumours of a bid when a director told Reuters of the upcoming meeting with an unidentified buyer of a large stake in the company.
Evraz had already paid $1.5bn for a controlling interest in steel group Delong Holdings which holds an option to buy 12% of Cape, fuelling speculation Evraz would launch a bid.
A Merrill Lynch nominee company had exercised 56 million options for a 14% stake in Cape, thought to be on behalf of Evraz.
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