WMC drafts in Cubitt for Xstrata defence

LONDON/NEW YORK/AUSTRALIA: WMC Resources, Australia’s last domestically-owned diversified miner, has drafted in Cubitt Consulting to handle financial communications as the company prepares its defence against mining conglomerate Xstrata’s £3bn hostile bid for the company.

WMC's Australia-based investor relations manager Jane Mussared said the firm had appointed Cubitt for general communications in the UK but added that the battle to fight off Xstrata was part of the firm’s brief.

Cubitt managing partner Simon Brocklebank-Fowler is leading the account in London. The deal also involves Cubitt’s New York office Cubitt Jacobs & Prosek.

Xstrata has worked with Michael Oke, founder of City PR firm Aura Financial, since the company’s flotation on the London Stock Exchange (LSE) in 2002, when Oke was MD of Prospero Financial. Oke has actually advised Xstrata CEO Mick Davis since 1997 when Davis was chief financial officer of Billiton, which merged with BHP in 2001, listed on the LSE.

On 30 November Davis argued that Xstrata’s offer of A$6.35 per share was a significant premium to WMC’s historic share price of A$5.00. He also criticised WMC’s planned upgrade of its Olympic Dam mine, which WMC claims as the world’s largest known source of uranium, as associated with ‘significant risks’.

WMC gets around 30 per cent of its revenues from the Olympic Dam mine, in south Australia, and believes that its plan to upgrade known reserves by 29 per cent would also make it the world’s fourth largest copper and gold mine.

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