First Quantum ups its offer for Inmet Mining
After being rejected with its first offer, First Quantum has returned with an improved C$5.1 billion (US$5.2 billion) takeover offer for rival Inmet Mining.
First Quantum, which operates mines from Zambia to Autralia, said that it had offered Inmet Mining’s shareholders a cash-and-stock deal valued at a $72.87 for each share in the Canadian copper miner.
The renewed bid for Inmet Mining represents a slight increase from a previously rejected $70.85-a-share takeover approach for the copper producer, and a 36 percent premium on the mining company’s closing share price before it rejected First Quantun’s initial advances, the New York Times reported.
Inmet Mining’s board had rebuffed an earlier offer in late November valued at $63.26-a-share.
First Quantum, which is based in Vancouver, British Columbia, said the proposed deal would create one of the world’s leading copper producers that could produce around 1.3 Mt/a (1.4 million stpy) of copper by 2018.
The mining company said it had taken its takeover approach directly to Inmet Mining’s shareholders, and called on the company’s board to reconsider its multibillion-dollar offer. First Quantum added that it had held discussions with a number of Inmet Mining’s key investors about the proposed deal. The company did not say which investors it had contacted.
“We believe strongly in the prospects of a combination for our two companies,” First Quantum’s chief executive, Philip Pascall, said in a statement. “Our clear preference remains to engage with Inmet, as we believe strongly in the compelling strategic and financial merit of the transaction.”
Despite concerns that a downturn in Asian economies could hurt short-term demand, companies are seeking to gain access to metals and minerals in expectation that fast-growing economies will soon rebound.
Inmet Mining, which is based in Toronto, owns the Cobre Panama copper project, one of the world’s largest remaining untapped deposits of the metal. The mining company expects to spend more than $6 billion to develop the site, and recently announced a 27 percent increase in the project’s copper deposits.
First Quantum said that it would fund the takeover through its cash reserves and $2.5 billion of bank credit.