(Reuters) - BHP-backed SolGold Plc (SOLG.L), the copper-gold company focused on Ecuador, is making a second attempt to take over Canada’s Cornerstone Capital Resources (CGP.V), whose largest shareholder said the approach is likely to be rebuffed.
The all-stock transaction of 11 SolGold ordinary shares for each Cornerstone share represents a premium of around 22% to the company’s closing price on Monday, SolGold said in a statement.
Shares of Cornerstone gained 13.5% to C$3.62 in Toronto.
At a market capitalization of C$103.1 million ($75.35 million), Cornerstone has an 8% stake in SolGold, making it its fourth biggest shareholder, and 15% of the Ecuadorian entity owning the Cascabel project.
It also has other gold, silver and copper projects in Ecuador and Chile.
SolGold in May announced a financing package of up to $150 million with streaming company Franco-Nevada Corp to develop its Alpala project.
Its previous offer for Cornerstone in February 2019, representing a premium of around 20%, was rejected on the grounds that it was undervalued.
“The previous proposal was dead on arrival. I expect it will be the same this time around,” said Maxit Capital Chief Executive Bob Sangha, who owns a 19.4% stake in Cornerstone, according to Refinitiv.
Reporting by Clara Denina; additional reporting by Jeff Lewis; editing by Barbara Lewis and Richard Chang