STOCKS NEWS EUROPE-Afferro weak on takeover talks uncertainty
Shares in Afferro Mining fall 7.8 percent with analysts' highlighting a Bloomberg report saying China's Jindal Steel & Power has ended potential takeover talks with the Toronto and London-listed explorer.
The report comes two days after Afferro said a period of exclusivity over talks with an unnamed third party had expired leaving the firm free to commence discussions with other parties.
International Mining and Infrastructure Corp. (IMIC) confirmed on January 2 that it had made an initial bid approach to Afferro, although the Cameroon-focussed miner said then that an exclusivity period precluded it from engaging in discussions with IMIC until January 13.
"Apart from IMIC there is no public disclosure on who the potential parties are who are in talks with Afferro and Jindal have not put out a public statement regarding their interest. A number of steel producers including Posco and Jindal are likely to be looking for iron ore projects to take a strategic interest in. Afferro needs a credible partner with deep pockets to be able to commercialise," SP Angel analyst John Meyer says in a note.
"Till something concrete materialises it is not surprising to see a sell off in the shares - the company has cash to keep this project going till they find the right partner. We would be buyers on weakness," Meyer adds.
Afferro shares have drifted back by around 9 percent from a closing peak of 100.50 pence hit on January 2 before dropping on Wednesday, with Afferro having said on December 31 that IMIC would be prepared to make an offer for it at between 115 pence and 150 pence a share, and media reports suggesting an offer price of 150 pence was possible.
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