First Quantum goes hostile with sweetened bid for Inmet
LONDON (Reuters) - Miner First Quantum FM.TO launched a sweetened offer for Canadian rival Inmet Mining IMN.TO, taking to shareholders a deal that values the owner of the giant Cobre Panama copper project at about C$5.1 billion ($5.2 billion).
The offer of an improved C$72 per share, compares with two previous approaches that valued Inmet at C$70 and C$62.50 per share - both rejected by the miner's board.
The deal would create what First Quantum says would be one of the world's top copper producers.
Inmet's shares rose 5.58 percent to C$73.73 on Monday shortly after markets opened on the Toronto Stock Exchange. First Quantum's shares were down 3.2 percent at C$20.28.
First Quantum said in a statement on Sunday that its vision of a combined group was shared by Inmet's "key shareholders" - potentially crucial support, given the top four investors own almost 40 percent of Inmet shares.
Its bid for Inmet led some analysts and investors to question whether First Quantum was moving away from a strategy that has relied on its engineering and construction expertise to deliver mid-sized projects at below-average cost. But like others in the sector, the miner has battled a dearth of high-quality copper deposits needed to fuel growth.
Inmet owns Cobre Panama, one of the world's largest untapped deposits and one of the last not already in the hands of a major miner. But the project is also one of the world's most expensive - a cost First Quantum believes it could considerably reduce.
On current guidance, the cost of developing the $6.2 billion Cobre Panama project stands at $23,000 per tonne, according to analysts at Nomura, compared with an average capital intensity for the sector of $18,500 per tonne - and around $6,000 per tonne for First Quantum's greenfield Sentinel project in Zambia.
First Quantum is one of the few global miners primarily focused on copper, with operations in Zambia's copper belt, as well as in Australia, Finland and Mauritania. Continued...