Sundance to seek new China suitor
China's Hanlong was unable to meet Tuesday's financial deadline for the $1.3 billion takeover of the Africa-focused iron ore hopeful.
By the close of trade on Wednesday, the Australian Securities Exchange had not received any announcement from Sundance.
Investors have already priced in the likelihood of the deal falling over, with shares in Sundance last trading at 21¢ due to Hanlong's inability to secure finance and serious leadership problems.
Sundance was placed in a trading halt on March 20.
Last week Hanlong told Sundance the credit approved term sheets required to be provided under the scheme implementation agreement as part of the takeover would not be delivered as planned, meaning either party could terminate the agreement.
Some analysts say Perth-based Sundance could now be broken up and sold off after Hanlong failed to bring the deal to a head.
Taking over Sundance would allow a player, such as a state-backed Chinese entity, to take control of the multibillion-dollar Mbalam iron ore project in Cameroon, near the Congo border.
Frequently Asked Questions about this Article…
Sundance Resources is likely to end takeover talks with China’s Hanlong Mining after Hanlong failed to meet a financial deadline for the proposed $1.3 billion takeover and told Sundance it would not deliver the required credit-approved term sheets.
The deal stalled because Hanlong was unable to secure the necessary finance, missed the set deadline, and faced serious leadership problems, which meant the credit-approved term sheets required under the scheme implementation agreement were not delivered.
Investors have largely priced in the collapse of the deal: Sundance shares last traded at 21¢ and the company was placed in a trading halt on March 20 while the market awaited clear announcements.
As of the close of trade on Wednesday, the Australian Securities Exchange had not received any announcement from Sundance confirming the end of talks.
Yes. Hanlong’s failure to deliver the required credit-approved term sheets means either party could terminate the scheme implementation agreement, allowing the takeover to be formally ended.
Some analysts say Sundance could be broken up and sold off now that Hanlong has failed to bring the deal to completion, opening the door for alternative buyers or asset sales.
The Mbalam iron ore project in Cameroon is a multibillion-dollar asset owned by Sundance; taking over Sundance would give a buyer — potentially a state-backed Chinese entity — control of that strategically significant project near the Congo border.
Investors should watch for an official ASX announcement from Sundance, updates on the trading halt, any confirmation of termination of the Hanlong agreement, news of new suitors or sales plans, and analyst commentary about possible break-up or asset sales.
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