This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sundance Says Hanlong Can't Meet Key Deal Deadline

SYDNEY (AP) â¿¿ Australia-based iron ore miner Sundance Resources Ltd. said its Chinese suitor Hanlong Mining Investment Ltd. can't meet a crucial deadline Tuesday for a 1.3 billion Australian dollars ($1.36 billion) takeover.

Investors have already factored in the likelihood of the deal falling apart. Shares in Sundance, which has operations in Africa, have slumped because of Hanlong's inability to secure finance and reports last week that Liu Han, chairman of the Hanlong Group, had been detained by Chinese police.

A Chinese police statement on Friday said that Liu was suspected of hiding a brother who is a fugitive in a murder case. Hanlong has been unable to contact Liu after a Chinese financial newspaper reported he was detained in mid-March.

Hanlong has told Sundance that details of financing required to be provided as part of the takeover will not be delivered as planned by Tuesday.

Either company can terminate the takeover if no new agreement is reached within five business days.

Michael McCarthy, chief executive of stockbroker CMC Markets, said the collapse of the deal was widely expected.

"Hanlong is going to be forced to step away because of factors that are beyond their control such as an inability to get finance and some concerns about the leadership of the company in China," he said. "What we're likely to see after this five-day meeting is a mutual statement that they've agreed to go their separate ways," he said.

McCarthy said it was extremely unlikely that Hanlong would be able to secure finance within five days, meaning Sundance could be later broken up and sold.

This scenario would be more likely than Sundance finding another suitor, he said.

Hanlong's proposed takeover of Sundance has dragged on for 20 months due to regulatory delays and Hanlong's inability to secure finance.

Hanlong executives have faced a volley of allegations of insider trading, market manipulation and tax allegations even as the company's overseas bankers have been talking up the company's bona fides.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs