(Adds Milpo could not be reached for comment, share price)
LIMA, April 9 (Reuters) - Brazilian conglomerate Votorantim said on Wednesday it will raise its offer by 16 percent to increase its stake in Peruvian miner Milpo MIL.LM MILi.LM, in a bid to control the local company.
Votorantim said it will pay up to $490 million, or $3.33 a share, up from its first offer of $422 million, or $2.87 a share.
If the offer is successful, Votorantim would own 51 percent of Milpo’s circulating shares, giving it effective control of the company.
“Fitch Ratings’ lifting of Peru to investment grade and the reevaluation of the sol (Peru’s currency) against the dollar were among the key factors considered when deciding to make a new offer,” Flavio Donatelli, head of finance and administration, said in a statement.
Votorantim, the world’s third-largest zinc producer, already owns 24.88 percent of Milpo’s shares in circulation. It previously said it has a letter of credit from JPMorgan to cover the purchase offer for 26.12 percent of shares in the market.
Last week, Milpo sent a letter to Peru’s securities regulator saying Votorantim’s takeover offer undervalued its share price and urged its shareholders to evaluate its plans and performance before deciding to participate in the public offer.
Milpo, a 60-year-old company that produces zinc, iron and copper says it runs some of the lowest-cost mines in the world and has a large exploration team. It could not be immediately reached for comment.
Votorantim has mining and metals operations throughout Latin America and, like other companies, is working to consolidate its holdings in the sector, helped by high global prices for metals.
On Wednesday, shares of Milpo closed at 9.35 soles on Lima’s stock exchange, up some 34 percent since the takeover offer was first made.
Peru is the world’s second-largest producer of zinc and copper. ($1 = 2.711 soles) (Reporting by Teresa Cespedes; Writing by Dana Ford; Editing by Carol Bishopric)