ENS advises on R9.1 Billion Acquisition of Mining House Metorex Limited

August, 2012 - Cape Town, South Africa

Jinchuan’s R9.1 billion acquisition of SA-based mining house Metorex made headlines over the past twelve months and was named Dealmakers’ Deal of the Year in March after being judged for its innovation and creativity, the deal size, the complexity of the matter, its value and regulatory approvals. The transaction entailed a competing offer by Jinchuan Group Limited through a wholly-owned subsidiary to acquire the entire issued share capital of Metorex Limited by way of a scheme of arrangement in terms of section 114 of the new Companies Act, 2008 and a separate offer to the holders of options in terms of Metorex’s share incentive schemes. The transaction involved many extraordinary aspects, including having to navigate the extensive restrictions and matching offer provisions in the Vale Implementation Agreement in order to procure access to information and to facilitate the Jinchuan offer; the very rare process of making a competitive offer for a listed company by means of a ‘competing’ scheme of arrangement (which was a first under the New Act); having to avoid the Jinchuan offer being materially different from the Vale offer and not imposing more onerous conditionality and having to structure the offer in a manner that would free the Metorex shareholders that had provided irrevocable undertakings to Vale from their commitments to vote in favour of the Vale Scheme. The Jinchuan scheme was also the first scheme of arrangement by a listed company to be proposed entirely under the New Act and therefore required consideration and compliance with the provisions of the New Act and the new Takeover Regulations. The leading practitioners involved in this matter included Taswell Papier, Richard de la Harpe and Matthew Morrison.

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