NEW YORK Inmet Mining
Corp. has again recommended that its shareholders reject First
Quantum Minerals Ltd.s hostile takeover bid.
First Quantums Canadian
$5.1-billion offer, which expires March 11, is simply too low,
Inmet chairman David Beatty wrote in an open letter to
shareholders March 8.
"I continue to urge you to
reject the inadequate First Quantum offer and not tender your
shares," he said. "The First Quantum offer was too low when it
was worth $72 (per share) in November. It is now worth
significantly less. While the long-term fundamental value of
Inmet has not changed, the value of the First Quantum offer has
declined to $67 (per share) as of (Thursdays) closing
price," Beatty said.
Shareholders should recoup some
of their investment as the Toronto-based company makes progress
on its Cobre Panama project, which is fully financed and
permitted, Beatty said.
While First Quantum claims it
could eliminate $1 billion in costs at Cobre Panama, which is
expected to drive Inmets copper production up 176 percent
by 2018 (
amm.com, Jan. 23), Inmet told shareholders that
First Quantum "has been unable to find the cost savings it
touted or has been unwilling to share them with Inmet
shareholders," Beatty said. "Still, First Quantum remains very
keen on obtaining Cobre Panama; they just dont want to
pay you fair value for it and have so far done nothing to
improve their offer."
First Quantum said previously
that its offer represented a premium of 65 percent to
Inmets underlying net cash-adjusted equity value as of
Nov. 23 (
amm.com, Dec. 17).
The average analyst target price
for Inmet is about $79 per share, while the analyst consensus
net asset value estimate is about $84, according to Inmet.