Is there a chance that FNX may buy FNI?
Breaking News from The Globe and Mail
FNX Mining builds war chest
FNX Mining raises $125-million for possible acquistions by selling stock
Andrw Willis
Wednesday, August 19, 2009
With institutions willing to throw money at the theme of playing aneconomic rebound, FNX Mining Co. raised $125-million in a stock sale tofund possible acquisitions.
FNX is a copper and nickel miner,with properties in the Sudbury area. It sold units for $9.65 each lateTuesday that consist of one common share and half a warrant, with eachwarrant giving the right to buy a share for $13 over the next threeyears. BMO Nesbitt Burns and GMP Securities led this deal.
Asis typical in these financings, FNX was somewhat opaque about just whatit plans to do with its capital. The company has no debt, and asizeable war chest - there was already $115-million of cash on thebalance sheet. The corporate line, straight out of the press release,is that “proceeds of this financing will be used to take advantage ofany future business opportunities and for general corporate purposes.”
In the absence of more information from FNX, here’s one thing to watchfor. This mid-tier company operates in an Ontario region dominated bytwo global players - Vale S.A. of Brazil and Switzerland’s Xstrata. Both of those companies carry enormous debts, and may be willing tosell properties to pay down loans. It’s possible FNX uses its financialmuscle to expand its holdings in Ontario’s near north.
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