SYDNEY, Jan. 11 -- Zinc metal producer Nyrstar NV (NYR.BR: Quote) has offered around A$148 million ($137 million) for Australian zinc miner CBH Resources Ltd (CBH.AX: Quote), a move that would give it access to its own raw materials supplies.
CBH said on Monday that the Belgian firm had offered A$0.135 cents cash per CBH share or alternatively Nyrstar shares.CBH shares dropped 3.5 percent to A$0.14 after initially rising to A$0.15 after the deal was announced.
A successful takeover would move Nyrstar, one of Europe's biggest zinc metal producers, a step closer in securing its own supplies of zinc ore.
Earlier this year, Nyrstar was forced to find alternative ore supplies after Australia's Century zinc mine unexpectedly halted shipments to repair a pipeline.
CBH recently reactivated equipment idled in 2008 when zinc prices crashed that will allow it more than double production to 850,000 tonnes from its mine in central Australia starting in mid-2010.
Zinc futures MZN3 are trading at around $2,555 per tonne, against about $1,500 in mid-July and about $1,100 a year ago.
A year ago, Chinese zinc miner Zhongjin Lingnan took a 50.1 per cent stake in Australian zinc miner Perilya Ltd (PEM.AX: Quote) in return for a A$45.5 million cash injection that kept the mine open and fended off a takeover attempt by CBH.
CBH also said it had not been approached by Perilya, dousing some media speculation the two companies were in talks again.
CBH has appointed Clayton Utz and RBC Capital Markets to advise it on the Nyrstar proposal.
Nyrstar was formed when Belgium's Umicore merged its already-sizeable zinc smelting businesses into a joint venture with those of the former Zinifex of Australia in 2007.