Shares of Inmet Mining got a sudden boost in late day trading as it made two separate announcements, indicating it has turned down a takeover bid from First Quantum Minerals and has adopted a shareholder rights plan to provide it more time to dissect future offers.
Inmet said it received an “unsolicited, non-binding, highly conditional” offer from First Quantum on Nov. 25, 2012, where the larger miner by market cap proposed to acquire [shares] for $70 a piece. First Quantum, which has two copper-gold mines in Africa and one in Australia, had offered to pay Inmet through an even mix of cash and shares.
That would have worked out to be a total cash payment of $2.461 billion and 112.679 million First Quantum shares.
Inmet, which operates three primary copper mines globally and is in the midst of constructing a forth mine in Panama, says it reviewed the proposal and chose to dismiss it as “it is not in the best interests of Inmet shareholders.”
The Toronto-based firm also revealed that this was not the first offer from First Quantum, noting that the Vancouver-headquartered miner made a similar unsolicited pitch on Oct. 28, for $62.50 per Inmet share. That was then declined by Inmet’s board on Nov. 1, and publicly disclosed today.
Around this time Inmet was engaged in its own takeover struggle for its Panamanian neighbour Petaquilla Minerals, which operates a small gold mine next to its Cobre Panama copper project. But that bid failed as Petaquilla said it didn’t consider the full value of its assets.
Perhaps that’s something that came up as Inmet was evaluating First Quantum’s offer. Rough calculations show that First Quantum’s $70-per-share offer represents a 30% premium to Inmet’s closing price on Nov.23, the last trading day before the latest bid was made.
To give it more time to respond to other unsolicited bids, Inmet announced it’s putting in place a shareholder rights plan, which still requires regulatory and shareholder approval.
On the rejected bid news, Inmet shares spiked 17% or $9.20 to close at $62 on 2.4 million shares traded. The company has 69.4 million shares outstanding and a market cap of $4.3 billion.
First Quantum lost 1.6% or 34¢ to close Nov.28 at $20.80 on a volume of 3.18 million shares traded. The miner has market cap of $9.9 billion and 476.3 million shares outstanding.
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