SouthernEra working the phones (May 15, 2007)

SouthernEra Diamonds (SDM-T, SRE-L) says it is in negotiations with possible white-knight bidders to thwart a bid from London-listed Mwana Africa (MWA-L) to take over the company.

Mwana announced on March 16 that it would launch a bid for SouthernEra, offering one Mwana share for 2.3333 SouthernEra. The bid at that time valued SouthernEra at $69.7 million.

On May 8 Mwana said that BHP Billiton (BHP-N, BLT-L, BHP-A) had agreed to a lock-up of its 9% shareholding in SouthernEra. SouthernEra has a right of first refusal that would allow it to buy back the shares at 43, or about $6.7 million. It would have to notify BHP that it intended to exercise the right by May 22.

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