Inova Resources (ASX: IVA) shares are up over 23% in early trading this morning thanks to an offer from private China's Shanxi Donghuis Coal Coking & Chemicals Group.
Inova was offered a 29% premium on yesterday's closing price of $0.17. Inova is part of Rio Tinto's (ASX: RIO) Canadian headquartered company, Turquoise Resources, which is responsible for the Anglo-Australian's massive Oyu Tolgoi gold and copper project in Mongolia.
Inova, formally Ivanhoe Australia, has been in a downwards spiral since the GFC, where it traded for over $3 per share. However, the offer has highlighted the resilience of demand for resources stemming from Asia.
Source: Google Finance
Turquoise Hill has entered into a pre-bid acceptance deed in respect of 14.9% of shares in Inova. The company has said it will sell all of its shares in the company once 51% of shareholders accept the offer.
It is believed the money from the deal will help to repay the $2.4 billion debt that Turquoise Hill owes to Rio for its development of Oyu Tolgoi. The deal is subject to approval by Australian and Chinese regulators.
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Motley Fool contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.
