More delays cause Sundance share plunge

Shares in Africa-focused iron ore hopeful Sundance Resources plunged almost 12 per cent after it revealed yet another delay in the drawn out takeover by its Chinese suitor.

The National Development and Reform Commission (NDRC) in China on Thursday extended its provisional approval for Hanlong's acquisition by six months to July 30.

The extension was granted on condition that Hanlong enter into an agreement with a Chinese corporation "with sufficient capability" to undertake the Mbalam project in Cameroon with Hanlong.

Sundance on Friday said the Hanlong offer remained its best option, despite further delays.

"The simple fact is that no superior offer has emerged and the market share price has not approached the Hanlong bid," the company said in a statement.

"In those circumstances, the Hanlong bid remains, in the absence of a superior offer, the board's recommendation."

Hanlong Group has proposed a $1.4 billion takeover of Sundance.

Shares in Sundance reached a five-month low when they resumed trading on Friday, closing down 11.76 per cent, ro four cents, at 30 cents.

This compares with Hanlong's 45 cents offer price, which itself is down from the Chinese group's original offer at 57 cents a share made over a year ago.

Mine Life senior Resources analyst Gavin Wendt said the market was half expecting another delay.

"It's another kick in the guts for Sundance," Mr Wendt said.

"It looks like it's going to go one for another six months and that's if you're being optimistic."

He said the long protracted process was a farce.

"The Chinese have been so non committal about it all. It's no surprise that there's further delays.

"It doesn't reflect well on the Chinese and the way they're treating our corporate guidelines."

Funding in the order of $5 billion is needed to develop the mine in Cameroon and associated port and rail infrastructure.

Sundance shares had been suspended from trade since January 30 as Hanlong sought an extension of its provisional approval from the NDRC.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9327-0.0005-0.05%
    AUDUSD=X
    0.5555-0.0003-0.05%
    AUDGBP=X
    0.6753-0.0003-0.05%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg