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Xstrata Offer AUD$8.4 Billion to Buy WMC

Xstrata Offer AUD$8.4 Billion for WMC


Xstrata plc (“Xstrata”) announces the increase of the existing cash offer by Xstrata Capital Holdings Pty Ltd, its subsidiary, of AUD6.35 per share (“the Offer”) for all the issued shares of WMC Resources Limited (“WMC”) to AUD7.20 per share (the “Increased Offer”).  This is an increase of AUD1 billion or 13.4% on the Offer, valuing WMC at over AUD8.4 billion.  The Increased Offer is final, and Xstrata will not consider any further increase to the offer price, unless a superior proposal is announced by WMC or another bidder. The closing date for the Offer remains 28 February 2005.

Announcing the Increased Offer, Xstrata plc Chief Executive Mick Davis said:

“Xstrata’s Increased Offer recognises the full value of WMC and provides WMC shareholders with certain cash value for their shares at a substantial premium to pre-speculation market prices. Our Increased Offer takes into consideration the views of the WMC board, the discussions we have had with WMC shareholders and the market trading since 28 October 2004. In addition, Xstrata has recognised the value inherent in the increased tax loss and lower end-of-year net debt positions of WMC that were set out in the WMC Target’s Statement.

“This is a premium offer at the top of the cycle which provides WMC shareholders with an unprecedented opportunity to realise full value for their shares, including benefits from synergies Xstrata will gain from combining with WMC.

“Over three months have passed since we first confirmed our interest in acquiring WMC, and yet no competing offer has emerged. This is despite other potential bidders having access to equal or greater information than Xstrata and ample time to consider their positions. In addition, we believe that any asset level transaction would be unable to deliver value to WMC shareholders at levels anywhere near our Increased Offer.

“Accordingly, Xstrata’s increased Offer of AUD7.20 per share crystallises a stark choice for WMC shareholders.

“It is important to highlight that, while we continue to believe that the merger of WMC and Xstrata would create a powerful global mining entity, WMC is only one of a number of attractive strategic growth options available to Xstrata.  We believe therefore that it is important that our Offer is concluded either way as soon as possible, both for Xstrata and for WMC employees and shareholders.”

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