Tony Sage's Mid-West iron ore play Fe Limited has put more pressure on the embattled board of Padbury Mining, announcing it will bid for the iron ore junior if existing directors Luke Innes, Gary Stokes and Colin Stirling leave the company.
Mr Sage, along with fellow Fe directors Mark Gywnne and Paul Kelly, have already been nominated for the Padbury board by a group of dissident shareholders led by businessman and former Padbury chairman Denis McInerney.
The dissident group has already demanded Padbury hold an extraordinary general meeting to vote on the appointment of the Fe trio and to remove Mr Innes and Mr Stirling, though Padbury has argued they have not met the necessary shareholder requirements to call a meeting.
Fe today said it would offer one Fe share for every 13 shares in Padbury, plus one cent cash per Padbury share on the successful conclusion of the offer. It pledged to make the bid within two months, provided the three targeted Padbury directors are removed or resign. The offer would also be conditional on Fe achieving minimum acceptances of 51 per cent.
In addition, it proposes to acquire all outstanding Padbury 1 cent options at their subscription price of 0.03 cents.
At Fe's current price of 10 cents, the proposed scrip offer would notionally value Padbury at 0.84 cents per share, rising to 1.77 cents if the post-bid cash sweetener is included. Both stocks were stronger ahead of today's news; Fe shares rising 5 per cent and Padbury rising 8.3 per cent to 1.3 cents.
Padbury's flagship asset is the Peak Hill iron ore project, about 100km north of Meekatharra, where it is aiming to confirm a major magnetite iron resource of 3-5 billion tonnes. It hopes to announce an initial resource by the end of the year.
In May, Padbury announced it had signed a conditional agreement with an unnamed Chinese group, which would see the Chinese party pay $5 million for 143 million Padbury shares at 3.5 cents each, over double the notional price being offered by Fe.
Padbury also then said it had signed confidentiality agreements with seven other Chinese groups interested in investing in either the company or the Peak Hill project.
