Dec 16 First Quantum Minerals Ltd
sweetened its unsolicited bid for Inmet Mining Corp,
valuing the smaller rival at about C$5.1 billion ($5.17
billion), and said the combined entity could potentially become
one of the world's top copper producers.
As per the new proposal, First Quantum is offering up to
C$2.5 billion in cash and would issue a maximum of 115.9 million
shares, in a deal that values Inmet at C$72 a share, or C$5.1
billion. This follows an initial bid of C$62.50 that was put
forward by First Quantum in October, which was later raised to
Inmet shareholders can opt to receive either C$72 per share
in cash, or 3.2962 First Quantum shares plus 1 Canadian cent.
Inmet stockholders also have an option to go for a mix of C$36
in cash plus 1.6484 First Quantum shares.
Shares of Inmet closed at C$69.83 Friday on the Toronto
Toronto-based Inmet, which is building the Cobre Panama
copper mine in Central America, had earlier turned down the
C$4.86 billion unsolicited proposal from First Quantum, saying
the offer was "highly conditional" and not in the best interests
of its shareholders.
Vancouver, British Columbia-based First Quantum, which owns
assets in Africa, Australia, South America and Europe, said on
Sunday the combined entity could become one of the top-five
copper producers in the world within five years, with the
potential to produce more than 1.3 million tonnes per annum of
copper by 2018.
"Our clear preference remains to engage with Inmet, as we
believe strongly in the compelling strategic and financial merit
of the transaction," First Quantum Chief Executive Philip
Pascall said in a statement.
Inmet's top three shareholders own close to 40 percent of
the company's stock, according to Thomson Reuters data. Without
their support, First Quantum would face an uphill battle if it
seeks to go hostile.
The cash component of the deal will be financed through a
combination of First Quantum's existing cash resources and a
$2.5 billion facility which is being arranged specifically to
implement the offer, the company said.