Analysts Report..LUN deal will Go AheadGlobe says analysts down on Jaguar's HudBay play
2008-11-25 05:54 ET - In the News
See In the News (C-JFC) Jaguar Financial Corp
The Globe and Mail reports in its Tuesday, Nov. 25, edition that HudBay Mineral's plan to buy Lundin Mining is not winning it any fans, but an attempt to block the deal and bust up HudBay is getting even less respect from analysts. The Globe's Andrew Willis writes in the Streetwise column that HudBay is bidding for debt-heavy Lundin to gain control of its copper mines. UBS Securities analyst Onno Rutten says HudBay is paying a "steep" price for Lundin. The all-stock offer is a 103-per-cent premium to the price of Lundin's stock. Mr. Rutten notes HudBay would also inherit marginal zinc mines and $470-million in Lundin debt. HudBay is not giving shareholders an opportunity to vote on the Lundin purchase, so it is likely to close. Mr. Rutten says the conditional "intention to make an offer for HudBay by microcap merchant bank Jaguar Financial has a low probability of proceeding." RBC Dominion Securities mining analysts say the Jaguar proposal "is a value-destroying concept and shareholders would be better off holding HudBay." Mr. Rutten says the Plan of Arrangement for the Lundin takeover offers limited legal room for cancellation "we therefore assign little probability to the Jaguar offer."