(Adds statement from Hudbay Minerals)
By Allison Martell
TORONTO May 2 Regulators on Friday gave Augusta
Resources Corp more time to find a white knight, ruling
that the miner's shareholder rights plan could stay in place
until at least July 15 despite a challenge by hostile bidder
Hudbay Minerals Inc.
Hudbay had asked the British Columbia Securities Commission
to block the rights plan, or poison pill, which makes hostile
takeovers difficult. Earlier on Friday, shareholders had voted
to maintain the plan at Augusta's annual meeting.
The ruling gives Augusta more time to find a friendly
bidder, but could also make it possible for Hudbay to complete a
hostile takeover if no rival tops its offer.
"We're pleased with this outcome," said Augusta Chief
Executive Gil Clausen in an interview. "It reflects the wishes
of our shareholders, and it allows us to continue our strategic
Hudbay wants control of Augusta's Rosemont project in
Arizona, widely seen as one of the most promising copper
projects in the United States.
If Hudbay extends its offer to July 16, and also agrees to
extend it for an additional 10 days if it takes up any shares,
the Commission will block the rights plan on July 15. Otherwise,
it will remain in place.
Clausen said Augusta has signed confidentiality agreements
with 11 parties, and is "actively engaged" with possible
Shareholders could have cleared the way for a Hudbay
takeover by voting against the poison pill at Friday's meeting,
but instead they backed it by a wide margin. Excluding Hudbay's
own votes, Augusta said, 94 percent of votes were in favor of
the rights plan.
Under Hudbay's offer, set to expire on Monday, investors
would get 0.315 of a Hudbay common share, worth C$3.06 at
Friday's close, for each share of Augusta. Augusta has called
the bid "grossly inadequate".
Hudbay said in a statement on Friday that the company was
pleased the B.C. Securities Commission decided to cease trade in
Augusta's shareholder rights plan in July, as it would "give
Augusta shareholders the opportunity to tender to our offer."
Shares of Augusta closed down 5.7 percent at C$2.99 on the
Toronto Stock Exchange on Friday.
(Additional reporting by Euan Rocha and Jeffrey Hodgson in
Toronto; Editing by Meredith Mazzilli, Bernard Orr and Mohammad