HONG KONG (Reuters) - Minmetals Resources Ltd (1208.HK) has agreed to buy Africa-focused copper miner Anvil Mining AVM.TO AVM.AX for $1.28 billion as the China government-controlled firm expands its global reach and adds base metal reserves.
Minmetals’ latest acquisition comes nearly five months after it bowed out of a bidding war to buy Canadian copper miner Equinox Minerals and underscores China’s growing appetite to secure supplies of natural resources to support the urbanization of its vast population.
Minmetals is offering C$8.00 a share, or a 39 percent premium, to Anvil’s Thursday close in Toronto stock exchange. Anvil’s depositary shares traded in Australia surged 32 percent to A$7.67 on Friday.
“It has been very clear that Minmetals has a mandate to make mining investment outside China,” Andrew Driscoll, head of resource research at CLSA Ltd said.
“Copper looks to be at top of their shopping list and after they decided not to counter bid for Equinox earlier in the year...the market certainly been expecting them to launch another bid,” he added.
Anvil said last month it had begun to review its strategic alternatives including a sale, sending its shares higher.
Minmetals, a government-backed unit of China’s largest metals trader, said in a statement that Anvil’s Kinsevere mine in Congo is expected to produce 60,000 tonnes of copper cathode per annum, substantially boosting the group’s copper exposure and extend its average mine-life.
Minmetals’ bid is subject to approval from Australian government, which in the past has raised concerns over takeover bids from China’s state-backed enterprises.
“The Anvil board has unanimously determined that the offer is in the best interests of Anvil and the Anvil shareholders, and has recommended that Anvil shareholders accept the offer,” Minmetals said in the statement.
BNP Paribas (BNPP.PA) is the financial adviser to Minmetals.
MinMetals will fund the deal through a financing facility and by tapping on its own cash reserves, it said, adding that it currently does not own any common shares in Anvil. ($1 = 1.032 Canadian Dollars)
Editing by Denny Thomas and Lincoln Feast