CIMIC's takeover bid for mining services provider Macmahon Holdings has become more complicated after Macmahon signed a heads of agreement which could give Indonesian miner Amman Mineral Nusa Tenggara a 44 per cent stake in the company.
AMNT operates the Batu Hijau project - Indonesia's second largest operating copper-gold mine - on the island of Sumbawa in the Indonesian province of Nusa Tenggara.
Macmahon on Wednesday said that under the HOA, Macmahon and AMNT will enter into an alliance-style mining contract for the life of the Batu Hijau mine which, it is expected, could generate about $US2.7 billion ($A3.5 billion) in revenue for Macmahon.
Macmahon will acquire about $US150 million in assets from AMNT, including loading equipment, trucks, ancillary and support assets, and usable inventory.
In consideration for the acquisition of the assets, Macmahon will issue AMNT with about 959.6 million new Macmahon shares, equal to about 44.4 per cent of the company on a diluted basis, at 20.3 cents per share.
The proposed AMNT deal is conditional on there being no change of control of Macmahon as a result of CIMIC's offer, with that defined as CIMIC acquiring voting power in Macmahon of greater than 40 per cent.
Investors welcomed the news, pushing Macmahon shares up two cents, or 13.33 per cent, to 17 cents by 1322 AEDT.
Macmahon on Monday rejected a takeover offer from construction giant CIMIC, which owns a 23.3 per cent stake in the company, as inadequate and opportunistic.
CIMIC has offered 14.5 cents for each Macmahon share, which values Macmahon at $174 million.
CIMIC's takeover offer expires on March 9, 2017.
The company on Wednesday said Macmahon's proposed AMNT deal was uncertain and dilutive for Macmahon shareholders, and significantly increased its risk profile.
"Macmahon is asking its shareholders to take the risk - to hope for improved outcomes in the future and back a potential proposal which will dilute existing shareholders - without adequate evidence that it can deliver on either of these outcomes," CIMIC said.
But Macmahon says the AMNT deal could be transformational and deliver substantial value to shareholders by increasing Macmahon's scale, operational diversity, revenue, profitability and growth prospects.
Chief executive Michael Finnegan said Batu Hijau was a world-class mine, and Macmahon had been developing the relationship with AMNT over the past six months.
""This transaction represents a very exciting opportunity for Macmahon and its shareholders, with the potential to generate long-term shareholder value," Mr Finnegan said.
"We believe that this strategic relationship with AMNT significantly strengthens our presence in the region.
"We are very excited at the prospects that this agreement may bring to our company, and look forward to working closely with AMNT to negotiate binding transaction documents, for the benefit of all of our shareholders."
If the proposed deal - which needs Macmahon shareholder and Australia's Foreign Investment Review Board approval - goes ahead, AMNT will appoint two new directors to Macmahon's board.
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