Equinox's $5 billion Lundin offer may spur bidding war
By Euan Rocha and Michael Smith
TORONTO/SYDNEY (Reuters) - Equinox Minerals has offered to buy Lundin Mining for C$4.8 billion ($5 billion) to expand production in Africa while copper hovers near record highs, a move that may trigger a bidding war with Canadian rival Inmet.
Equinox, which owns one of Africa's largest copper mines, said on Monday its C$8.10-a-share cash and stock bid is far superior to Inmet's rival offer, which would pay no premium to Lundin shareholders.
Equinox's bid, which comes at a time when China is driving global demand for copper and pushing prices to record highs, is 26 percent above Lundin's closing share price on Friday.
Even as Lundin said its board would review the Equinox proposal, the company's top management slammed the unsolicited bid as unattractive and too risky.
"What are the possible strategic operational benefits that come from a combination with Equinox? I've looked and I see zero. If they're there, they're eluding me at this stage," said Lundin Chief Executive Phil Wright said at a conference in Florida.
Under the friendly Lundin-Inmet arrangement, announced a month ago, the pair would join forces to form a major Canadian copper miner called Symterra with a market capitalization of C$9 billion. Shareholders of Inmet would own 52.6 percent of the new company and Lundin investors the rest.
What's at stake is Lundin's 24.75 percent stake in Freeport McMoRan's massive Tenke-Fungurume copper-cobalt mine in the Democratic Republic of Congo and its Neves-Corvo copper mine in Portugal, along with other assets in Sweden, Ireland and Spain.
"We've been looking at Lundin for years now to be honest," Equinox Chief Executive Craig Williams told Reuters. "We've been following their progress and we know their two key assets -- Tenke and Neves Corvo -- pretty well and have looked at them in the past." Continued...