African Iron directors accept Exxaro offer

Saturday, 21 Jan 2012

African Iron directors have now formally accepted Exxaro offer for all of the African Iron shares and listed options owned or controlled by them.

Exxaro is offering AUD 0.51 cash for each African Iron share which Exxaro will increase to AUD 0.57 cash per share if it acquires a relevant interest in 75% or more of all the African Iron shares. Exxaro is also offering AUD 0.31 cash for each listed option which Exxaro will increase to AUD 0.37 cash per listed option if it acquires a relevant interest in 75% or more of all the African Iron shares.

The acceptance of Exxaro offer by the African Iron directors in respect of a total of 1,300,000 shares and 100,000 listed options held by them follows the announcement earlier this week that African Iron largest shareholder, Cape Lambert had formally accepted Exxaro offer for shares equivalent to 19.99% of African Iron.

The acceptance accords with the statements included in African Iron Target Statement regarding the directors’ intentions to accept the offers and increases Exxaro interest in African Iron shares above 20%.

In African Iron Target Statement, the African Iron directors also declared their intention to accept Exxaro private offers for all of the African Iron unlisted options owned or controlled by them.

Dr Ian Burston African Iron, Independent Non-Executive Chairman said “the Board had carefully considered Exxaro takeover offer and recommended that shareholders and listed option holders accept it, in the absence of a superior proposal. All shareholders and option holders should this week receive African Iron’s Target’s Statement which details the offers and we encourage them to read this document carefully before they make any decision.”

As detailed in the Target Statement, African Iron shareholders and option holders have a number of alternatives available to them:

I. Accept Exxaro offer for their African Iron shares and/or listed options
II. Sell their African Iron shares and/or listed options on market

III. Listed option holders can exercise their options and sell the shares on market; or Do nothing.

Dr Burston said that “Shareholders and option holders should be aware that if they do nothing, the price of African Iron shares and options is likely to fall if the offer closes and Exxaro has acquired a relevant interest in less than 90% of the African Iron shares on issue.”

The African Iron board unanimously recommends that shareholders and option holders accept the Exxaro takeover offers in the absence of a superior proposal.

Exxaro takeover offer will remain open until 5.00pm Perth time on 14 February 2012 unless extended.