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(Reuters) - First Quantum Minerals Ltd (FM.TO) said on Thursday it is both "surprised and disappointed" that the board of Inmet Mining Corp IMN.TO has decided to reject the takeover proposal that it put forward earlier this month.
Toronto-based Inmet, which is building the huge Cobre Panama copper mine in Central America, said on Wednesday it had turned down a C$4.86 billion ($4.89 billion) unsolicited proposal from larger rival First Quantum, stating that the offer was "highly conditional" and not in the best interests of its shareholders.
"The transaction would have presented an opportunity to realize immediate and attractive cash value for the holders of Inmet shares while preserving the opportunity for both sets of shareholders to participate in the substantial upside value that we believe would be created through a combination," said First Quantum's Chief Executive Philip Pascall, in a statement.
Vancouver, British Columbia-based First Quantum, which owns assets spread across Africa, Australia, South America and Europe, said it had approached Inmet in the hopes of striking a friendly deal.
"First Quantum is both surprised and disappointed at the circumstances under which the Inmet board chose to forego this significant opportunity," said Pascall, adding that the company had approached Inmet on three separate occasions to engage in discussions.
Under First Quantum's proposed cash and share proposal, the company is offering up to C$2.461 billion in cash and issued a maximum of 112.679 million shares, in a deal that values Inmet at C$70 a share, or C$4.86 billion. This follows an initial bid of C$62.50 that was put forward by First Quantum in October.
Shares in Inmet, which closed at C$52.80 on Tuesday, rose more than 17 percent to C$62 following news of the First Quantum offer on Wednesday. Inmet shares rose a further 4.3 percent in early trading on Thursday to C$64.65.
Reporting by Euan Rocha; Editing by Gerald E. McCormick