LONDON Global copper
miner First Quantum Minerals Ltd. says it plans to make an
unsolicited Canadian $5.1-billion ($5.2-billion) offer for
Toronto-based copper and zinc miner Inmet Mining Corp.
This represents an increase from
its previously rejected offer of $4.89 billion.
According to First Quantum, the
combined entity could potentially be one of the worlds
five largest copper producers.
demonstrated project execution, reflecting its in-house
engineering, project management and construction expertise,
gives it the confidence that it can bring significant benefits
to Inmets major project, Cobre Panama," the company
Under the terms of the offer,
Inmet shareholders would receive a consideration of C$72
($72.96) per Inmet share, and could to elect to receive First
Quantum shares, cash or a combination thereof, subject to an
overall consideration mix of about 50 percent shares and 50
percent cash, First Quantum said.
The offer represents a premium
of 65 percent to Inmets underlying net cash-adjusted
equity value as of Nov. 23, according to First Quantum. The
offer also represents a premium of 35 percent to Inmets
30-day volume-weighted average price and 33 percent to its
closing share price as of Nov. 23, the company said.
"We believe strongly in the
prospects of a combination for our two companies, which are
uniquely complementary," Philip Pascall, chief executive
officer and chairman of First Quantum, said in a
A combination of First Quantum
and Inmet would create a copper company with the potential to
produce more than 1.3 million tonnes per year of the red metal
by 2018, according to the company.
Inmets management said in
a statement Monday that it had not yet taken a position on the
"The offer has not yet been
received by Inmet, and Inmet shareholders are advised to take
no action at this time. The board of directors of Inmet, in
accordance with its fiduciary duties and with counsel from its
financial and legal advisers, will fulfill its legal
responsibility and will evaluate any formal offer and will
recommend a course of action that is in the best interests of
Inmet and its stakeholders. Until such time as we make a public
announcement, we will refrain from providing any statements or
interviews to media outlets," it said.
In late November, Inmet rejected
an earlier hostile takeover bid by First Quantum (
amm.com, Nov. 29).
Full details of the proposed
deal will be laid out in the formal offer and takeover bid
circular, which is expected to be sent to Inmet shareholders in
early January, then filed with Canadian securities
The offer will be subject to
certain conditions, including confirmation that the recently
adopted Inmet shareholder-rights plan will not negatively
affect the potential deal.
The offer must also be accepted
by Inmet shareholders owning at least 66 percent of the
outstanding shares on a fully diluted basis, as well as receipt
of regulatory approvals.
A version of this article was
first published by AMM sister publication Metal