Territory Resources

A$172m Recommended On-Market Takeover by Noble Group

August 2011

On 23 May 2011, Exxaro Resources Limited, a South African-based diversified miner listed on the JSE, announced a friendly off-market takeover offer for Territory Resources, an ASX-listed, Australian-based iron ore mining company. Territory’s key asset is the 100%-owned Frances Creek project, an operating iron ore mine producing lump and fines iron ore for export.

Exxaro’s conditional offer of $0.46 cash per share represented a 64% premium to Territory’s previous closing price before the announcement and was recommended by a majority of Territory’s Board. The offer was accompanied by an agreement with Rand Merchant Bank to provide financing support to Territory should existing loan facilities provided by Territory’s largest shareholder, Noble Group, require refinancing.

On 9 June 2011, Noble Group, via its wholly-owned subsidiary Jonesville Limited, launched an unsolicited on-market takeover offer for Territory at $0.50 cash per share. Noble’s offer represented a premium of 8.7% to Exxaro’s offer and implied an enterprise value of A$172 million for Territory. Noble’s offer was unanimously recommended by Territory’s Board on 14 June 2011.

Following 90.5% acceptance of Noble’s offer, Noble (via Jonesville) proceeded to compulsory acquisition on 12 August 2011.

Azure advised Territory on all aspects of the takeover defence and financing.