June 12, 2007 / 3:57 AM / 12 years ago

UPDATE 2-Chinalco to buy Peru Copper for C$840 mln

(Repeats story first issued on June 11 with no changes to text) (Adds details, shares)

TORONTO, June 11 (Reuters) - Peru Copper Inc. PCR.TO has agreed to be bought by state-owned Aluminum Corp. of China Ltd. (601600.SS) in a friendly deal worth C$840 million ($792 million) in cash, the Canadian company said on Monday.

The offer of C$6.60 a share is a 21 percent premium to Peru Copper’s 20-day volume weighted average price of C$5.45 on the Toronto Stock Exchange ended May 23.

The company’s shares were up 10 Canadian cents at C$6.45 after the announcement on Monday.

It has been conducting a strategic review of its options since last November, and said in May that it was in exclusive talks with a third party.

Peru Copper buys and explores for copper deposits in Peru and is listed in both Toronto and Lima.

The Vancouver, British Columbia-based company owns the Toromocho copper project, which it has said could become one of the biggest copper mines in Peru by 2010, producing 300,000 tonnes of refined copper a year.

The company’s board of directors has unanimously recommended the deal, while 34 percent of its shares are committed via lockup agreements, it said.

Aluminum Corp., also known as Chinalco, said the deal was an important step it its strategic growth outside China.

“(It) will provide us with an opportunity to leverage the strength of our balance sheet and our extensive project development expertise to advance the Toromocho project,” Chinalco president Yaqing Xaio said in a statement.

“We look forward to identifying further investment opportunities in Peru and around the world.”

The announcement comes as Chinese companies increasingly snap up mining players to satisfy demand for commodities.

Chinalco also said it has purchased about 13.2 million shares of Peru Copper in a private placement at C$5.30 a share, or C$70 million.

The private placement, which is not conditional on the success of the takeover deal, will give Chinalco 9.9 percent ownership in Peru Copper.

Peru Copper will have to pay a C$21 million break fee to Chinalco if the deal doesn’t go through.

UBS Investment Bank is acting as financial adviser to Peru Copper, while BMO Capital Markets is advising Chinalco.

$1=$1.06 Canadian

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