DAILY NEWS Dec 17, 2012 4:00 PM - 0 comments

TAKEOVER: First Quantum doubles bid for Inmet

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VANCOUVER – Not one to give up easily, First Quantum Minerals has made a hostile offer for Inmet Mining of Toronto – an offer double what it offered at the end of November. First Quantum's initial offer was $70 per Inmet share, or a total of $2.5 billion.

Inmet management was quick to reject the offer. 

Nor was it the first time Inmet had been in First Quantum's sights. Near the end of October the Vancouver company offered $62.50 per Inmet share. Inmet had no trouble saying "no" to that bid.

Now, on Dec. 16, First Quantum made a  new offer – $72.00 per Inmet share, half in First Quantum shares and half in cash. Total price of the deal is now $5.1 billion. First Quantum sees potential to create the world's premier, widely held base metals company by combining the two producers. The new company would also be one of the world's five largest copper producers with opportunities for growth. Most of all, First Quantum would like to gets its hand on Inmet's 80% interest in the Cobre Panama project now in development.

Inmet on Dec. 17, said it had not yet received First Quantum's formal takeover offer. Management said it would examine it carefully and act in the best interests of its shareholders. Meanwhile, those shareholders were advised to take no action.

On Dec. 12 last week, Inmet made an offering of its own. It is proposing to offer US$500,000 of senior  unsecured notes maturing June 2021 with an interest rate to be based on prevailing market conditions. And the following day, the company announced a 27% increase to reserves at Cobre Panama. Total proven and probable reserves are now 3.06 billion tonnes grading 0.38% Cu, 0.006% Mo, 0.07 g/t Au, and 1.3 g/t Ag. With 25.9 billion lb of contained copper and 7.3 million contained oz of gold, Inmet plans to expand the life of the Cobre Panama to 40  years.

Details of the offer will be posted as they become available at First-Quantum.com and at InmetMining.com.

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