After two failed attempts of a friendly takeover on Inmet Mining, First Quantum Minerals has gotten hostile in pursuit of the rival company by taking its third offer, a $5.1 billion bid, directly to Inmet shareholders.
In an offer mailed to Inmet shareholders Jan. 9, First Quantum offered consideration of C$72 per Inmet share; an all share offer of 3.2967 First Quantum shares for each Inmet share; or a combination of 50 percent in First Quantum shares and 50 percent in cash (1.6484 First Quantum share and C$36 in cash).
The merger would create a top five copper mining company and would give First Quantum the Cobre Panama project, the $6.2-billion project Inmet is building in Central America, which will be the biggest mine in the region’s history.
Inmet announced on Dec. 13, 2012, that proven and probable reserves at its 80 percent-owned project now include 25.9 billion lbs. of copper and 227 t (7.3 million oz) gold.
“I believe this combination creates a uniquely attractive, large, liquid and high growth copper focused company,” said Philip Pascall, First Quantum CEO. “First Quantum and Inmet are very complementary in terms of their copper focus. I see the combination of the two companies creating not only a new global leader in copper, but also one of the most exciting, ‘must-own’ companies in the global mining sector.”
“We are taking the significant step of making this proposal directly to Inmet shareholders and requesting their support for what, together, we know can be achieved,” he added.
The cash component of the offer will be financed through a combination of First Quantum’s existing cash resources, existing undrawn, unconditional financing facilities of US$1.25 billion and a US$2.5 billion acquisition facility provided by Standard Chartered Bank, which has been arranged specifically for the offer.
Inmet shareholders have until 5 p.m. on Feb. 14 to accept the offer.
Inmet Chairman David R. Beatty, said in a release, “The Inmet Board will carefully evaluate the terms of First Quantum’s unsolicited bid. As part of this process, the Inmet Board has formed a special committee to review this offer.”
“We will carefully consider, among other things, whether or not the First Quantum offer adequately compensates our shareholders for Inmet’s full value, including the untapped exploration and expansion potential of Cobre Panama and the Substantial increase in valuation our shareholders will receive once Cobre Panama reaches commercial production. We will also consider the potential risks associated with receiving First Quantum shares as consideration,” Beatty added.