(Reuters) - Canadian mining explorer Augusta Resource Corp AZC.TO, target of a hostile takeover bid by HudBay Minerals Inc (HBM.TO), said on Friday that nine parties have expressed interest in the company in response to its strategic review.
Augusta Chief Executive Gil Clausen said the review is likely to be completed ahead of a May 9 shareholders meeting. “I would expect that, depending on how discussions progress, that it’s a reasonable time frame,” he said in an interview.
Augusta, which started the strategic review process after HudBay’s takeover offer in February, said in a release that nine parties, including “significant industry players”, have signed confidentiality agreements and were reviewing Augusta’s books.
“We’re happy with both the quality and the quantity of the participants,” Clausen said.
On May 9, Augusta shareholders will vote on whether to cancel the company’s shareholder rights plan or keep it in place. Shareholder rights plans, often dubbed “poison pills,” are designed to make hostile takeovers difficult or impossible.
In a regulatory filing posted on Friday, HudBay, which has a 16 percent stake in Augusta, said that if shareholders do not cancel the plan, it could ask for a cease-trade order. If granted by regulators, such an order would effectively block the poison pill.
HudBay wants to buy Augusta to gain control of its Rosemont project in Arizona, widely seen as one of the most promising copper projects in the United States.
HudBay offered 0.315 of its shares for each Augusta share, which values the company at about C$387 million ($350 million) at current prices.
HudBay said 242,404 shares had been tendered as of March 13. Augusta has about 145.4 million shares outstanding.
HudBay told Reuters last month that it would not sweeten its bid for Augusta, or enter into a bidding war if a rival offer emerged.
Augusta said it would arrange visits to the Rosemont project over the next few weeks.
Augusta shares were trading up 2.7 percent at C$3.44, while HudBay shares were up 1.3 percent at C$8.46 on Friday on the Toronto Stock Exchange.
Augusta’s stock has risen by more than a third and HudBay shares have fallen about 10 percent since HudBay first made its offer public.
Reporting by Ashutosh Pandey in Bangalore and Allison Martell in Toronto; Editing by Savio D'Souza; and Peter Galloway