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ASX 200 climbs, Crown soars, Mineral Resources drops

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX: XJO) went up by 0.7% to 6,753 points today.

A takeover offer and the iron ore sector featured in the headlines.

Here are some of the highlights from the ASX today:

Crown Resorts Ltd (ASX: CWN)

The Crown Resorts share price soared today after confirming that it had received a hefty takeover offer from Blackstone.

The ASX 200 casino operator revealed that yesterday it received an unsolicited, non-binding and indicative proposal from a company on behalf of funds managed and advised by The Blackstone Group and its affiliates to buy the whole of the Crown business at a price of $11.85 cash per share. The purchase price would be reduced by any dividends paid.

This indicative price of $11.85 cash per share represented a premium of 19% to the volume-weighted average price of Crown shares since the release of the FY21 half-year result.

At this stage, the offer is still subject to a number of conditions including due diligence and arranging debt finance.

Blackstone currently has a shareholding of 9.99% in Crown which it acquired from Melco Resorts & Entertainment at $8.15 per share in April 2020.

The Crown board hasn’t yet formed a view about this offer, but it will now make an assessment of the proposal with the help of financial adviser UBS and legal adviser Allens.

Freedom Foods Group Ltd (ASX: FNP)

Freedom Foods has crashed 82% after coming back to the market after its long-term suspension. In early trading the share price dropped to just $0.20.

Last week the company announced a recapitalisation plan of up to $265 million to continue its turnaround so that it could substantially repay its bank debt which would provide a flexible capital structure.

The offer comprises an offer of unlisted, subordinated secured convertible notes to eligible wholesale investors of up to $130 million, with priority given to eligible existing shareholders, and a $200 million commitment to subscribe for notes secured from its majority shareholder, Arrovest, the investment vehicle of the Perich family.

Senior lenders National Australia Bank Ltd (ASX: NAB) and HSBC will provide a new 2-year senior secured revolver facility to the company, along with a 2-year term debt facility for up to $50 million, depending on the total note proceeds raises.

All shareholders, excluding Arrovest, will get the chance to apply for ASX-listed options on a pro-rata basis.

Iron ore miner movements

Iron ore resource businesses were in the headlines today.

One of the biggest movers in the ASX 200 was Fortescue Metals Group Ltd (ASX: FMG) which fell 4.3%. The BHP Group Ltd (ASX: BHP) share price fell 1.1% and the Rio Tinto Limited (ASX: RIO) share price fell 1.5%.

Mineral Resources Limited (ASX: MIN) saw a share price fall of around 4%. It told investors today that it had delivered its first iron ore production from the Wonmunna iron ore mine in the Pilbara region, Western Australia. This was achieved less than five months after breaking ground, which was in line with that company’s guidance.

Mineral Resources expects the mine to ramp up to the approved 5 million tonnes per annum (mtpa) run rate in the quarter ending 30 June 2021. There is the potential to expand Wonmunna’s output to 10mtpa after the successful grant of additional approvals for little additional capital cost.

Chris Ellison, Mineral Resources managing director, said:

Wonmunna’s rapid and safe development is testimony to the MRL team’s ability to deliver what others thought impossible. It is the innovative design of our NextGen crushing plants and the agility of our people who make this happen.

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Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. The Motley Fool Australia has recommended Crown Resorts Limited and Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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