Felix Surges Amid Speculation Vale May Seek Takeover

By Jesse Riseborough and Rebecca Keenan

Aug. 14 (Bloomberg) -- Felix Resources Ltd., the best performer on Australia's benchmark index this year, rose the most in four years in Sydney trading amid speculation Brazil's Cia. Vale do Rio Doce may seek a takeover.

Felix rose A$2.79, or 18 percent, to A$18.34 at the 4:10 p.m. Sydney time close on the Australian stock exchange, its biggest gain since August 2004. Vale and China's Shenhua Group Corp. may be studying bids for the Brisbane-based coal producer, the Australian Financial Review reported today in its Street Talk column, without citing anybody.

There's ``speculation that a bid may be pending for them by Vale,'' Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney, said by phone today.

Coal and iron ore producers have soared this year as rivals and steelmakers including ArcelorMittal and Posco bought mines or shares in producers to secure raw material supplies. Felix, which has a market value of A$3.5 billion ($3.1 billion), appointed advisers last month following takeover approaches from several unnamed companies.

``At this time the interest shown by parties remains preliminary, incomplete, non-binding and conditional,'' Felix said today in a statement.

Vale and Xstrata Plc may seek to buy Australian coal mines amid surging prices, ABN Amro Holdings NV said last month.

John Jackson, exploration manager of Vale's Australian unit, wasn't immediately available for comment when contacted at his Brisbane office.

To contact the reporters on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net; Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net.