GREY:CCNMF - Post by User
Comment by
muffin17on Jul 30, 2012 9:34am
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Post# 20164426
CAA takeout by Hudbay
CAA takeout by Hudbay You may have hit the nail on the head AARMY. From Hudbay's perspective it would be an immediate accretive move t0 take out Callinan. Hudbay needs about $400m in cash to finance it new mine developement in Peru (Constantia asset). If the offer was a 2 CAA shares per Hudbay share and was successful, then Hudbay:
- is only diluted by 25m shares,
- eliminates $25m a year in Royalty payments from the 777 mine or 100m over the buildout period of the new mine
- eliminates the $1+ million a year it will have to pay on the new 777 North mine, which is scheduled to begin production in Q4/2012.
- picks up the Warbaby claims, adjacent to the 777 mine workings, which will probably extend the mine life of Hudbays 777 mine by many many years
- eliminates the CAA lawsuit against Hudbay, which would probably save HBM more than $100m + in future payouts.
Callinan shareholders get $4.25 a share based on HBM's price lately. This is an all time high for the CAA stock I beleive. However at $4.25 the Callinan assets would be valued at about $200m. Given the above positives to HBM, I would not be voting to accept such a deal. IMO a 1 for 1 stock swap would be acceptable.
Muff