The long delayed takeover of Australian coking coal miner Caledon Resources by Guangdong Rising Assets Management (GRAM) moved a step closer Thursday, as the boards of both companies confirmed the offer terms of the agreed bid.

With the Chinese state authorities giving the green light to the merger on 15 June, GRAM and Caledon said all the pre-conditions, set out in the original bid announcement on 8 November 2010, have been satisfied.

The acquisition is expected to be completed by August 2011.

The takeover will be effected by a scheme of arrangement, whereby Caledon shareholders will receive 112p in cash for each Caledon share held. Holders of the Australian shares will receive the equivalent of 112p in Australian dollars for each of their Caledon (CDI) shares.

The terms, agreed in principle back in November of last year, value Caledon at £313.1m.

"The Caledon share price has been supported by the prospect of this transaction during a time when the equities markets have been under some pressure. The announcement by GRAM of this recommended cash offer allows shareholders and CDI holders to now crystallise that support by way of cash," Caledon's managing director Mark Trevan said.

In a separate press release, natural resources investment company Polo Resources, which holds a 29.8% stake in Caledon, said it will receive £100m in cash proceeds due to the sale of Caledon to GRAM.

Polo said it intends to use a part of the proceeds to fund a special dividend of 1p to its shareholders.

Shares of Caledon rose 1.6% to 110.75p in afternoon trading, while Polo shares jumped 4.4% to 5.64p.

AR

Related share prices
Caledon Resources (CDN) share price
Polo Resources Ltd. (DI) (POL) share price