Major drilling TSE-MDI Message Board

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Gold/Mining/Energy : Major drilling TSE-MDI

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To: Peter who wrote (5)	5/9/1997 5:43:00 PM
From: Peter	of 71

Another mail that looks interesting: Major Drilling has just announced a takeover bid for all the ordinary shares of Mining World Limited (Australia) Group. The cost of the current offer is $13.3 million Cdn. to be funded entirely from existing working capital and a term loan facility, with no dilution to MDI shareholders. MDI already holds approx. 3 million shares or 17.71% of Mining World, purchased on the market and through private placement. This is a 'friendly' takeover bid, with many synergies to be derived a the merger of the two companies. The recently reorganized and refocused Mining World operates three main businesses. Subsidiary Universal Drilling Systems is the largest manufacturer of drilling rigs in Australia, manufacturing the premier combination drilling rig on the market, and is currently enjoying record sales and orders. If we are indeed about to enjoy the seven year mining boom suggested by many at this year's Toronto Prospectors convention, drilling rigs and parts could be in great demand by companies which service the mining exploration industry. The successful acquisition of Mining World by Major Drilling would give MDI ready access to drill rigs and drilling supplies; the merger will provide Mining World access to the MDI market of over twenty worldwide locations, as well as its distribution network for the sale of this equipment. MDI's existing customer base includes many of North America's largest mining and exploration companies. Without considering additional synergies between the two companies, the merger will add approx. 20 cents per share to MDI's bottom line (worth at least $2 to MDI shares at a multiple of 10?) Of course the offer may not be accepted and could attract other offers. Should another company make a successful bid, MDI would most likely sell its existing 17% at a profit and look for something else.

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