First Quantum Minerals Ltd. (TSX: T.FM, Stock Forum) said Thursday it is both surprised and disappointed to have a $4.86 billion takeover offer rejected by the board of target Inmet Mining Corp. (TSX: T.IMN, Stock Forum)
In a press release, First Quantum said its Chairman and Chief Executive Officer Philip Pascall contacted senior Inmet executives on October 28th, 2012 in a bid to discuss the benefits to shareholders of such a combination.
“This was followed up with a formal letter outlining the merits of the combination and terms of First Quantum’s proposal of $62.50 per Inmet share. On November 1st, Mr. Pascall received a short written response from Inmet CEO Jochen Tilk declining this proposal.’’
It is widely thought that First Quantum is eyeing Inmet’s flagship asset, the Cobre Panama copper mine in Central America.
First Quantum subsequently proposed to raise the offer price to $70 a share, structured as 50% cash and 50% First Quantum shares. However, Inmet declined to engage in discussions saying it believed the new proposal to be “highly conditional.’’
Mr. Pascall commented: “This transaction would have presented an opportunity to realize immediate and attractive cash value for the holders of Inmet shares while preserving the opportunity for both sets of shareholders to participate in the substantial upside value that we believe would be created through the combination.’’
He went on to say that “First Quantum is both surprised and disappointed at the circumstances under which the Inmet Board chose to forego this significant opportunity without ever engaging in any discussions as they were three times invited to do.’’
Inmet said in a press release Wednesday it has adopted a shareholders rights plan, a move it said gives the company’s board of directors and shareholders more time evaluate a takeover bid.
As investors await the next move, Inmet shares rose 4% to $64.45, leaving the company with a market cap of $4.47 billion, based on 69.4 million shares outstanding. The 52-week range is $70.34 and $37.01.
First Quantum eased 1.5% to $20.49, leaving the company with a market cap of $9.8 billion, based on 476.3 million shares outstanding. The 52-week range is $25 and $16.46.