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MagIndustries to be bought by Evergreen for $115m

Published: 12:48 20 Apr 2011 EDT

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Potash explorer MagIndustries Corp. (TSE:MAA) said Wednesday it has agreed to be bought by Evergreen Industries, a diversified industrial holdings company in China, for C$115 million in cash.

The C$0.25 friendly takeover bid represents a 67% premium to MagIndustries' closing price yesterday. The company's shares rose 55% to trade at $0.225 as of 12:27pm EST on Wednesday.

MagIndustries' principal asset is a 2,000 square kilometer area within Kouilou province in the Republic of Congo.

"Over a period of several years, MagIndustries has thoroughly reviewed, analyzed and assessed all the possible options for the company to finance the Mengo project and we have now come to the conclusion that the Evergreen's offer is the best available option to our shareholders and to the company," said chairman Gerard Munera.

Under the terms of the deal, a reciprocal non-completion fee of C$3 million will be payable in certain circumstances, the companies said.

MagIndustries' board has approved the deal, and certain shareholders have already entered lock-up agreements to vote in favour of the offer. The transaction remains subject to both shareholder and regulatory approvals.

Evergreen's holdings are focused in the fields of shipbuilding, marine engineering, mining and logistics.

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