The global race for copper reserves continues as China’s Zijin Mining has agreed to pay about $1.8 billion to acquire Canada’s Nevsun.
Reuters reported that Zijin Mining, which specializes in gold, copper and zinc, will offer C$6.00 per share in cash for Nevsun, the companies said, representing a premium of about 21 percent to Nevsun’s close in Toronto on Sept. 4.
Zijin Mining beat out Lundin which took its all-cash offer of C$4.75 per share directly to Nevsun shareholders on July 26, after its five previous proposals were rejected by the company.
After rejecting Lundin’s offer, Nevsun said in August it had entered into confidentiality agreements with 18 interested parties, and had received four proposals from mining and smelting companies, indicating their willingness to purchase up to a 19.9 percent stake in Nevsun.
Zijin’s offer is subject to a minimum tender requirement of two-thirds of Nevsun’s shares, they said.
Zijin will have to pay a termination fee of $50 million to Nevsun in certain circumstances, including failure to receive approval from Chinese authorities, according to the statement.
Zijin will be eligible for a termination payment of $50 million if Nevsun accepts a superior offer.
BMO Capital Markets advised Nevsun on the deal, while Morgan Stanley advised Zijin.
Nevsun shares on the Toronto exchange are up nearly 30 percent since Lundin made its offer public on May 7.