Inmet says its offer for Lundin superior to Equinox bid
TORONTO (Reuters) - Inmet Mining said on Thursday its offer for Lundin is superior to the rival bid from Equinox Minerals, saying its proposal involves fewer risks and brings better value to shareholders.
"The Equinox offer for Lundin is a high-risk, low-reward proposition, due to excessive debt, lack of strategy on future asset development plans, questionable growth projections and significant execution risks," said Inmet Chief Executive Jochen Tilk in a statement.
The Lundin-Inmet deal, announced in January, is structured as a so-called "merger of equals" and offers no premium to Lundin shareholders.
Under the friendly Lundin-Inmet deal, the two companies would form a major Canadian copper miner called Symterra with a market capitalization of about C$9 billion. Shareholders of Inmet would own 52.6 percent of the new company and Lundin investors the rest.
Equinox has argued that its C$4.8 billion bid, announced in February, offers Lundin shareholders a significant premium.
Inmet contends the premium Equinox suggests is misleading and does not reflect the risks inherent in the transaction.
"Taking the considerable financing, transaction costs and closing risks into consideration, an Equinox acquisition of Lundin would clearly be value-destructive," said Tilk.
"Inmet believes the proposed creation of Symterra through the friendly merger of Inmet and Lundin is clearly a superior option for shareholders of both companies," he said.
(Reporting by Euan Rocha; Editing by Frank McGurty)
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