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Swiss miner to buy M.I.M. for $3bn
LONDON, England (CNN) -- Swiss mining group Xstrata has agreed to buy Australian rival M.I.M. Holdings for A$4.9 billion ($3 billion) in cash and debt. Xstrata, the world's fourth-biggest coal exporter, said on Monday it would pay A$1.72 for each M.I.M. share, representing a 38 percent premium to M.I.M.'s closing share price in November before the two said they were in talks. The company plans to raise $1.4 billion through the sale of shares to existing investors to partly fund the deal. The acquisition diversifies Xstrata's business and assets out of South Africa, where mining laws are changing from apartheid-era practices. South Africa plans to sell 26 percent of mines to black investors within a decade as compensation for discrimination. Xstrata's take over is the biggest of an Australian company since a Macquaire Bank-led group bought Sydney Airport for A$5.6 billion in June. Shares in Xstrata soared 8.9 percent to 528 pence in early London trading. But while the board of M.I.M. was recommending the deal to shareholders, Managing Director Vince Gauci was opposed to the deal. "Gauci considers that the proposal does not adequately reflect the value of the company," M.I.M. said in a statement to the Australian Stock Exchange. But many analysts said shareholders would be happy with Xstrata's offer. "You just have to remember that M.I.M has been a colossal disappointment to all investors over the past 10 years,'' Gavin van der Wath, senior research analyst for Allianz Dresdner Asset Management, told Reuters. "You get to a stage eventually as a shareholder that you say why am I in the stock -- is it for a takeover bid, is it for long term? We're in it for a takeover bid,'' he said.
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