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(Reuters) - Canada's Inmet Mining Corp IMN.TO is backing away from a hostile takeover of Petaquilla Minerals Ltd PTQ.TO after its C$130 million ($130.46 million) offer failed to secure shareholder support.
Shares of Inmet rose 1.4 percent on the Toronto Stock Exchange after the Toronto-based base metal miner said on Tuesday its minimum tender option was not met and the offer had expired. Petaquilla's stock dropped more than 23 percent.
Petaquilla owns a small gold mine adjacent to Inmet's massive Cobre Panama copper project in Panama, which is now under construction.
Inmet first offered to buy Vancouver-based Petaquilla in September in a cash-and-share deal that valued the smaller miner at about C$109 million. It then boosted its offer to some C$130 million in October.
Petaquilla's management rejected both offers as too low and has suggested that it is of strategic value to Inmet as it holds certain land rights that could have an impact on the development of the $6.2 billion Cobre Panama project, a claim Inmet has denied.
Petaquilla's shares fell 23.44 percent to C$0.49 on the Toronto Stock Exchange on Tuesday, still well above its close of C$0.35 the day before Inmet's original offer. Inmet's stock rose 1.41 percent to C$56.75.
$1 = 0.9965 Canadian dollar Reporting by Julie Gordon; Editing by Steve Orlofsky