OTTAWA (dpa-AFX) - Inmet Mining Corp. (IMN.TO) on Tuesday urged its shareholders to reject First Quantum Minerals Ltd.'s (FM.TO, FQM.L, FQVLF.PK) hostile bid to acquire the company for C$5.1 billion in cash and stock. Inmet said the offer is financially inadequate and poses substantial risks.
In a statement, Inmet Chairman David Beatty said the First Quantum offer fails to adequately compensate shareholders for Inmet's low risk asset base and strong prospects for growth and value creation at its much touted Cobre Panama copper mine that is moving closer towards production.
The Cobre Panama mine is expected to drive a 176 percent increase in Inmet's copper production by 2018 and the company's valuation will immensely benefit shareholders, Beatty added.
Further substantiating its stand, Inmet said that First Quantum has no experience in developing projects the size of Cobre Panama and no relevant experience in Latin America. First Quantum is also dubiously reputed for underestimating development costs and exaggerating production expectations, Inmet said.
Inmet also said its board is scouting all possible strategic alternatives to maximize shareholder value. The company has approached third parties who have expressed an interest in considering alternative deals, and has entered into confidentiality and standstill agreements with some parties, several of which are examining confidential financial, operating and other relevant data.
First Quantum earlier this month approached Inmet shareholders with a C$72 per share offer, which consists of 50 percent in First Quantum stock and the remainder in cash. The offer is to expire on February 14 and is subject to conditions that have yet to be satisfied.
In Toronto, Inmet is trading at C$71.23, up 0.41%, while First Quantum is down 2.11%, trading at C$20.88.
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