CHICAGO Jan 12 First Quantum Minerals Ltd's
hostile C$5.1 billion ($5.17 billion) takeover bid for
Inmet Mining Corp took a tense turn on Saturday, as the
Canadian base metal miner delivered a letter to its rival
suggesting Inmet may be trying to scuttle the bid, which is now
in the hands of shareholders.
The letter, addressed to Inmet's board chairman David
Beatty, said several large shareholders of Inmet had approached
First Quantum to express concern that the smaller company could
be shopping around a minority interest in its Cobre Panama
copper project in Central America.
"These concerns are apparently based upon discussions with a
senior executive officer of Inmet," said First Quantum Chief
Executive Philip Pascall in the letter released to the public.
Inmet holds an 80-percent stake interest in the Panamanian
project, which is one of the world's largest undeveloped copper
deposits. The company has already sold a precious metal stream
to help fund the $6.2 billion development.
By selling an additional stake in Cobre Panama, Inmet would
make itself less appealing as a takeover target, said Pascall,
implying the move was tantamount to sabotage.
Beatty described the letter as "plainly hostile and
counterproductive" in a statement released on Saturday.
The company and the board "are engaged in a thorough and
rigorous process to evaluate First Quantum's offer and to
explore the full range of all potential alternatives that may
provide greater value to Inmet shareholders, including those
activities that have been commenced prior to First Quantum's
bid," Beatty said.
First Quantum mailed its C$72-a-share offer directly to
Inmet's shareholders on Wednesday, starting the clock on a
takeover that would would create one of the world's largest and
fastest-growing copper-focused producers
The latest offer, first outlined in mid-December, follows an
initial bid of C$62.50 put forward in October. The next month,
First Quantum raised its bid to C$70.
If successful, the deal would give First Quantum control of
the massive Cobre Panama project, easing its dependence on
Africa and particularly Zambia.
The First Quantum offer will be open until Feb. 14 unless
extended or withdrawn, and is contingent on a minimum take-up of
66-2/3 percent of outstanding shares, along with regulatory
Nearly 40 percent of Inmet is held by four shareholders,
including holding company Leucadia National Corp, which
has backed the deal, in absence of changed circumstances.
First Quantum is being advised on the deal by Jefferies
International, Goldman Sachs and RBC Capital Markets, while
Inmet is being advised by CIBC World Markets.