* Shares down nearly 20 pct to C$6.89 on TSX
* Company says will not revisit Inmet deal for now
* Lundin focused on exploration, smaller acquisitions
(Adds Canada stocks, analyst and company quotes)
By Julie Gordon and Patrick Lannin
TORONTO/STOCKHOLM, May 26 Shares of Lundin
Mining (LUN.TO) dropped nearly 20 percent on Thursday after the
Canadian-Swedish mining group said it had rejected several
buyout bids and its chief executive would resign in a month.
The company said on Wednesday it had received several
expressions of interest in all or part of the company but
decided they were all too low. [ID:nL3E7GQ00N]
"The board has decided that we will not break up the
company and we will not sell the company as a whole, based on
those offers," said Senior Vice President Paul Conibear on a
conference call Thursday morning.
Lundin's shares opened down 18.81 percent at C$6.95 on
Thursday morning on the Toronto Stock Exchange. They later
slipped further to C$6.89, while its Stockholm-quoted shares
(LUMIsdb.ST) were down 20.25 percent at 44.25 crowns.
The steep sell-off was expected by analysts, who said that
further bids for the copper producer are unlikely.
"We expect shares to be under pressure as the likelihood of
no transaction occurring has significantly increased," said UBS
Securities analyst Matt Murphy in a note to clients.
"We would anticipate the probability of hostile bids for
Lundin thereafter being fairly low," he added.
Lundin, long pinpointed by analysts as a likely participant
in small-scale consolidation, has been at a strategic
crossroads since a C$9 billion combination with Inmet IMN.TO
fell through earlier this year.
What the companies characterized as a "merger of equals"
collapsed after Lundin was the object of a hostile C$4.7
billion takeover bid from Equinox Minerals EQN.TO. Equinox
later abandoned that deal when Barrick Gold (ABX.TO) agreed to
buy the African-focused minerlast month.
Since the original Inmet deal was announced in early
January, Lundin's shares have risen as much as 26 percent to a
high of C$9.31 late last month. The company said on Thursday
that it has no plans to revisit a deal with Inmet at this
Analysts had also suggested Lundin as a potential target
for Minmetals (1208.HK), the Chinese group whose hostile offer
for Equinox was trumped by Barrick Gold.
Chinese miners, facing ravenous domestic demand, have
pursued copper assets arduously.
Last month Canadian news reports said a consortium led by
China's Jinchuan Group and including a sovereign wealth fund
was preparing an offer for Lundin. [ID:nLDE73S0T6]
Lundin also said that Chief Executive Phil Wright will step
down at the end of June as part of a previously announced
Conibear will take charge as interim CEO from June 30 until
a successor is found.
GOING IT ALONE
With a "merger of equals" or buyout off the table for now,
Lundin said that it will refocus on developing its existing
assets and expanding its base metal business.
"We've been in transaction mode for a long time now," said
Conibear. "It is time for us to put our heads down and focus on
He said the company would now focus on internal growth, in
particular an exploration program at the Neves-Corvo mine in
The company also has projects in Sweden, Ireland and Spain,
and owns a 24.75 percent stake in the Tenke Fungurume copper
mine in the Democratic Republic of Congo, which is operated by
Freeport McMoran (FCX.N).
With an unused debt facility, significant cash on hand and
the potential to turn to the equity market for more funding,
the company said it is looking at acquisitions even as it
focuses on existing operations.
Conibear said he is looking for copper or high-quality zinc
projects in Africa, Europe and the Americas.
He would not give a cash value, but said that the company
is considering early stage projects, as it looks to keep a
strong balance sheet for future development at Tenke.
"We wouldn't see burdening the company with any big huge
cash outlay right now," Conibear said.
He also said the company would consider selling non-core
assets like Aguablanca in Spain but was otherwise not
interested in selling individual projects.
"This is not a garage sale," Conibear said. "We are not
going to breaking up the company into little bits and pieces."
(Additional reporting by Clara Ferreira-Marques in London;
Editing by Frank McGurty)