Companies: AZR    CBM   

West Australian iron ore group Mount Gibson Iron is bidding £86 million in shares for AIM-quoted Aztec Resources.

Mount Gibson, currently quoted Down Under at the equivalent of 31p, is offering one of its own shares for every three of fellow Aussie group Aztec, now 10.25p on AIM, in a bid to gain control of Aztec's large Koolin Island iron ore deposit. With effectively no premium on today's price, the offer puts a value of £86 million on Aztec, whose shares have traded between 4.1p and 12p over the past 12 months.

Aztec calls Mount Gibson's offer 'opportunistic ' ahead of the development of Koolin Island. But Aztec's biggest shareholder, AIM-quoted Cambrian Mining with 35 per cent, is keen to accept, arguing the deal gives an entree to Mount Gibson's own hefty iron ore interests in Western Australia – and shows Cambrian an £8 million paper profit on its holding.

Aztec investors should hold on for now.