Under the offer to acquire all the issued shares in Polaris, shareholders will receive one Mineral Resources share for every 12.5 Polaris shares held.
The offer values Polaris at A38c per share, or around $67 million based on the company’s shares on issue.
The price per share represents a 26% premium to the 30c closing price before the company entered the trading halt and a 53% premium to the average 25c share price for the past three months.
A separate offer will be made for all Polaris options currently on issue.
Polaris recommends that shareholders accept the offer, saying it is the stand-out from a range of proposals for developing the Yilgarn iron ore project.
The company believes Yilgarn can sustain exports of 5 million tonnes of iron ore annually for up to 20 years.
Polaris and Mineral Resources are already involved in the Poondano project, currently in development with start-up planned for the first half of 2010, initially targeting iron ore exports of more than 500,000 tonnes per annum through Port Hedland.
Diversified mining services and contracting company Mineral Resources operates one of the most substantial on-highway, mine-to-market supply chains in Western Australia and is the third-largest exporter by volume of base metals through Port Hedland to Asian markets.
Polaris technical director Jonathan Lea told MiningNews.net the size and capabilities of Mineral Resources would enable Polaris to fast-track its project development and enter production sooner than expected.
Polaris’s major shareholder, Heron Resources, has already entered into a pre-bid acceptance agreement with Mineral Resources in respect of its 19.9% stake.
The combined group will have a market capitalisation in excess of $651 million, minimal debt and strong cash flow.
Mineral Resources has indicated that, subject to the successful bid, Polaris’s management team will be integrated into the company as a specialist iron ore resources business unit.
It is expected that a bidder’s statement will be available in mid-September with a target statement to follow.
Shares in Polaris were untraded this morning at 30c; likewise, Mineral Resources shares remained at $4.77.
