South Africa’s Exxaro Resources made a bid worth up to A$338 million ($349 million) on Wednesday for African Iron, chasing the Australian-listed company’s Mayoko iron ore project in the Republic of Congo.

The offer of up to A$0.57 a share sent African Iron’s shares up 35 percent to A$0.54, indicating investors expect the deal to go through.

Exxaro has lined up a 19.99 percent stake from African Iron’s top shareholder, Cape Lambert Resources, which owns a further 5.26 percent stake.

Key to the outcome will be African Iron’s other big shareholder, Equatorial Resources, which owns the neighbouring Mayoko-Moussondji project.

Equatorial, which bought a 19.99 percent stake in African Iron last year at A$0.30, did not say on Wednesday whether it would accept the offer, but said it welcomes Exxaro’s interest in Equinox.

“Exxaro’s announced takeover offer for African Iron confirms the significant exploration and development potential of iron projects in the Mayoko region and highlights the advantages of the investment friendly jurisdiction of the ROC,” Equatorial said in a statement to the Australian stock exchange.

Exxaro has already received approval from Australia’s Foreign Investment Review Board and South African approvals.

Cape Lambert’s shares rose 1.9 percent to A$0.535 and Equatorial’s shares rose 4.2 percent to A$2.00 outpacing a 1 percent gain in the broader market.

Exxaro is being advised by Investec and law firm Gilbert+Tobin. African Iron’s legal adviser is Freehills.

($1 = 0.9681 Australian dollars) (Reporting by Sonali Paul; Editing by Lincoln Feast)

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