Miner Xstrata Plc announced a $1 billion offer for South Africa's Eland Platinum Holdings Ltd and met forecasts with a 47 percent rise in first-half net profit on Tuesday.
Swiss-based Xstrata said its 105 rand-a-share cash offer was 14 percent above Eland's 30-day volume-weighted average price and that it had secured support from shareholders owning 51 percent of the South African firm, including its directors.
We believe that Eland's production of concentrate in the very near term and strong growth pipeline provide an ideal platform from which to grow a world class PGM (platinum group metals) business, Xstrata said in a statement.
London-listed Xstrata, which currently specialists in copper, coal, ferrochrome, nickel, vanadium and zinc, reported net profit of $3 billion for the six months to June 30, in line with analysts' average forecast.
Higher prices for almost all its metals and minerals offset rising costs and a setback to production volumes from strike action in, for example, Chile and Montreal, it said.
The operational issues that impacted negatively on volumes in the first half are now behind us and notwithstanding the ongoing weakness of the U.S. dollar and the recent retrace of the nickel price, the outlook for the second half of the year is positive, Xstrata said in a statement, forecasting a stronger operational performance for the rest of the year.
Demand from ... developing Asian economies, the growing economies of the Middle East and the continued robust economic progress in Europe will more than offset slowing demand from the U.S., where lower housing starts and tighter credit are likely to impact consumption of key commodities, including copper and zinc, it said.
From a small, Swiss-domiciled producer of steel alloys known as Sudelektra Holding AG in the late 1990s, Xstrata has grown rapidly to challenge the world's biggest miners, such as BHP Billiton, Rio Tinto.
It made three big acquisitions last year, including Canadian nickel miner Falconbridge. But it has had less luck so far this year -- it lost a $6.4 billion battle for Canada's LionOre Mining to Russia's Norilsk Nickel and shareholders in Australia's Gloucester Coal voted down a deal.
Xstrata, 36-percent owned by commodities giant Glencore, proposed an interim dividend of 16 cents a share, up 38 percent on the same period last year.
Its shares have performed in line with UK-listed miners this year. They closed at 2,931 pence on Monday, valuing the firm at 28.5 billion pounds ($58.13 billion).