NMDC bids for 50% in Australia's Legacy Iron Ore

State-owned miner NMDC today said it has submitted a formal binding bid to acquire 50% stake in Australian exploration firm Legacy Iron Ore for an undisclosed amount.

With this, the Indian firm has move a step closer to its first overseas acquisition.

"We have submitted a formal binding bid for acquiring 50% stake in Legacy, as was envisaged in the MoU inked with them and if Legacy's Board approves it, we will taking stake in the Australian firm," NMDC Chairman Rana Som told PTI over phone from Istanbul.

He, however, declined to comment on the deal size by saying that "it's still confidential".

However, according to industry sources, the deal size is in the range of AUD 32 million to 40 million (Rs 150 crore to Rs 200 crore).

They added NMDC is believed to have taken the weighted average of last three months of Legacy's scrip, which has been moving in the range of 13 to 18 cents.

Legacy said in a filing to the Australian Securities Exchange (ASX) that it has received a formal proposal from NMDC to form a strategic alliance. Trading of its shares on the ASX has been halted till tomorrow.

"The company wishes to provide an update on a formal offer received from National Mineral Development Corporation (NMDC) of India regarding a proposal to form a strategic alliance via a cornerstone investment," Legacy said.

According to the MoU of May 24, NMDC decided to form a strategic alliance with Legacy by acquiring 50% stake in the firm.

On August 24, Legacy announced halt in trading of its shares for two days, anticipating the NMDC bid. However, it said later that the bid was expected by mid-September.

Legacy Iron Ore, based in Perth, holds prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia. It currently has five exploration licences including for gold mining.

"With our expertise in iron ore mining and steel making and their (Legacy's) exploration expertise, we will make a perfect synergy for both the companies. Simultaneously, it will provide us a ready made foothold in Australia," the NMDC Chairman said.