The news: Territory Resources (iron ore producer listed on ASX) released a document yesterday recommending its shareholders to accept a takeover from Noble. Reasons cited included Noble’s offer being a premium to the Exxaro offer, and a significant premium to the historical share price of Territory Resources.
Our thoughts: Noble already owns 32% of Territory Resources, which implies it would need to fork out ~A$94m to acquire the remaining shares that it does not already own. We do not expect this to have a material impact on Noble’s earnings and balance sheet and are leaving our earnings forecasts unchanged. Maintain BUY and TP of S$2.50.
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