M&A

11 November, 2009

UPDATE 2-China's Jien set to take control of Canadian Royalties

* Says majority of investors tender shares, debentures

* Extends offer until Nov 24

* Jien looking to retain employees: Canadian Royalties CEO

* Canadian Royalties shares up about 7 pct (Recasts; adds details, CEO comments, share movement)

By Ashutosh Joshi

BANGALORE, Nov 11 (Reuters) - Jilin Jien's (600432.SS) bid to take control of early-stage miner Canadian Royalties (CZZ.TO) looked increasingly likely, after the No. 2 Chinese nickel producer said its tender offer had received support from a majority of Canadian Royalties' investors.

Jien Canada, the joint venture formed by Jilin Jien and Canada's Goldbrook Ventures (GBK.V) said more than 70 percent of shares and 76 percent of debentures of Canadian Royalties have been tendered so far, and said it extended the expiry of its offer for the remaining holdings until Nov. 24.

The JV needed the support of both two-thirds of shareholders and debenture holders to complete the C$192 million deal to acquire Canadian Royalties.

"I think it's a reasonable expectation that the deal will move forward now," Canadian Royalties Chief Executive Glenn Mullan said by phone.

Jien Canada, which offered 80 Canadian cents for each Canadian Royalties share and C$800 for each C$1,000 debenture, faced opposition from a group of debenture holders, led by merchant bank Jaguar Financial (JFC.TO).

The Jaguar-led group was seeking a premium over Jien's offer, and had looked set to block the deal as it claimed support from more than a third of debenture holders. [ID:nBNG318301]

"There were some debenture holders, who changed their minds and tendered their debentures," Jaguar Financial Chief Executive Vic Alboini told Reuters.

However, he declined to comment on whether he would continue to oppose the deal.

Glenn Mullan, who tendered his minority stake in the company, said Jien Canada was looking to retain Canadian Royalties' employees as well as its social and environmental initiatives.

The executive, however, said it was "highly unlikely" that he would retain his position in the company, post deal completion.

Shares of Canadian Royalties closed up 4 Canadian cents at 79 Canadian cents Wednesday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Gopakumar Warrier, Anthony Kurian)

Source: http://www.reuters.com