First Quantum Minerals Ltd. (TSX: T.FM, Stock Forum) said Tuesday it has agreed to acquire Lumina Copper Corp. (TSX: V.LCC, Stock Forum) in a cash and share transaction worth $470 million.
Lumina Copper shares rose 23% to $9.58, leaving a market cap of $421.6 million, based on 44 million shares outstanding. The 52-week range is $8.43 and $3.86.
First Quantum shares eased 2.3% to $21.15, leaving a market cap of $12.5 billion, based on 590.8 million shares outstanding. The 52-week range is $23.50 and $14.22.
Lumina is the 100% owner of the Taca Taca copper deposit located in the Puna region of northwest Argentina. It hosts a 43-101-compliant resource of 21 billion pounds of copper, contained in 2.2 billion tonnes, grading 0.44% copper, 0.08 grams per tonne gold, and 0.013% molybdenum (0.57% copper equivalent), Lumina said in a press release.
“I am very pleased with First Quantum’s proposed acquisition of our company,’’ said Ross Beaty, Lumina’s founder and largest shareholder.
“This transaction provides Lumina shareholders with the option to retain exposure to Taca Taca’s future development in the hands of a world class mine development and operating team through ownership of First Quantum’s shares,’’ he said.
“I encourage all Lumina shareholders to vote in favour of this transaction.’’
Under the agreement, Lumina shareholders may elect to receive in exchange for each common share held:
$5 in cash and 0.2174 of a First Quantum share.
0.4348 of a First Quantum common share and $0.01 in cash, subject to proration as to the number of First Quantum common shares if the total number of First Quantum common shares Lumina shareholders elect to receive exceeds 9,669,182; or
$10 in cash, subject to proration as to the amount of cash if the total cash Lumina shareholders elect to receive exceeds $222,391,175.
Lumina shareholders who do not elect any of the three options above shall be deemed to have elected to receive the cash alternative in respect of all their Lumina common shares.
Lumina said the $10 cash consideration for each common share of Lumina represents a 34% premium to the volume-weighted average trading price of the common shares of Lumina on the TSX Venture Exchange of $7.44 for the 20 trading days ended June 16, 2014, and a 28% premium to the closing price of the common shares of Lumina on the TSX Venture Exchange of $7.80 on June 16, 2014.