TORONTO — China’s largest construction company was in talks to buy a controlling stake in Allana Potash Corp. that was worth more than the takeover bid the junior miner eventually accepted.
The Financial Post received a copy of a memorandum of understanding (MOU) between Allana and state-owned China Communications Construction Company Ltd. (CCCC). The document, dated March 4, contemplated a deal in which CCCC would acquire a 51 per cent interest in Toronto-based Allana for $156 million. CCCC would then take charge of financing and construction responsibilities on Allana’s US$700 million Danakhil potash project in Ethiopia.
Ultimately, the two sides did not move beyond this framework agreement to reach a firm deal. On March 26, Allana agreed to a takeover offer from Israel Chemicals Ltd. (ICL) worth $137 million.
Sources close to Allana said the firm tried to negotiate a binding agreement, but the Chinese company dragged its feet. Chinese…
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