Aussie to sell $100 million stake in Australian mining giant after Australian Securities and Investments Commission rejects bid

AUSTRALIAN Financial Review can reveal the Federal Government is poised to sell its stake in Australia’s largest mining company to a foreign company after the Australian Securities Exchange (ASX) rejected its bid for the shares.

The decision comes after the ASX said it could not find any evidence of the proposed sale of shares in the mining giant Valeant Pharmaceuticals, which has been accused of misleading investors and the public by mismanaging its finances.

It is the latest development in a bitter public feud between the Government and the company, which had been valued at $US4.5 billion ($6.2 billion) before the ASG approved its acquisition by Valeant last year.

But it comes after Valeant had its Australian operations seized by Australian authorities and its Australian-listed shares suspended in a series of regulatory probes.

The Government is currently considering a $US100 million cash sale to a buyer to be announced by the end of the year.

The ASX has a ban on buying or selling shares that are listed on foreign exchanges.

It is also required to issue notices to shareholders when it believes a foreign transaction is in the public interest.

In a statement, the Government said the sale of Valeant shares “does not comply with the ASZ’s requirements”.

The company had a reported $US3.4 billion in debt, but it is understood the Government’s offer of a cash cash settlement is more modest than that.

The deal would have been subject to approval by the Australian Investment Bank, but was approved on Thursday by the regulator.

The Government would not comment on the proposed transaction.

The ABC has requested an interview with a representative of Valeance, but has not received a response.

In September last year, the ASB rejected Valeant’s bid to buy the Australian shares.

In December, it also rejected the Valeant bid for its Australian shares and the Australian Federal Police launched an investigation into the Australian company.

The company’s Australian operations have been seized by authorities and it has been forced to suspend its Australian stock exchange trading.

The latest developments come after Valeants Australian operations were seized by police last month and the Federal Police conducted an investigation after it was learnt Valeant was in breach of Australia’s sanctions regime on bribery, fraud and money laundering.

The Australian Federal Government has rejected a $50 million offer from Valeant in a bid to sell off the Australian operations.

The Federal Government said it was considering the proposed deal.

In the statement, it said the ASQ will not be commenting on the matter further until after it has completed its assessment of the potential buyer.

“The Government has not commented further on the offer or any other matters,” the statement said.

Valeant declined to comment.

The Valeant-owned Australian shares are listed as the ASL.

ASL has long been a key market for foreign companies, with more than $US1 billion traded on the ASLL last year alone.

“Valeance’s Australian operation is a significant and growing presence in Australia, with an estimated $US2.2bn in annual sales,” Valeant said in a statement.

“However, it is not in the best financial health, and the Government has the opportunity to take advantage of this market.”