Afferro Mining has confirmed International Mining & Corporation (IMIC) is taking over the African-focused iron ore company.
The two have agreed the terms of the proposed acquisition, which will be put to the shareholders for approval.
IMIC intends to acquire the mining company by way of a plan of arrangement in Canada which requires the approval of at least two thirds of Afferro's shareholders.
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Afferro said a deal will be subject to the completion of relevant documentation including satisfactory final financing arrangements, and the receipt of a fairness opinion from its financial adviser as to its terms of the proposed offer.
IMIC will buy Afferro for £190m, including cash and convertible loans.
"The board believes that the 120p per share proposal offers good value and the ability for further upside with the exposure to the strong relationships built by IMIC with the key consumer that is China," said Afferro's Chairman, David Netherway.
Haresh Kanabar, Chairman of IMIC, added: "We are delighted to agree the terms of the proposed offer for Afferro with the board of Afferro. We believe that the combination of IMIC and Afferro is highly attractive in that it brings together Afferro's high quality African iron ore assets with a deliverable infrastructure and offtake solution."
Shares rose 9.57% to 77.25p at 09:25 Wednesday.
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