Vancouver-based First Quantum Minerals Ltd. (TSX:FM; LSE:FQM) has expressed disappointment at Toronto-based Inmet Mining Corp. (TSX:IMN)’s rejection of its takeover bid.
Yesterday, Inmet rejected the bid and adopted a shareholder rights plan. Inmet described First Quantum’s bid as an “unsolicited, non-binding, highly conditional” proposal for a half-cash, half-First Quantum shares deal valuing Inmet shares at $70.
“After reviewing the proposal with its financial and legal advisors, Inmet’s board of directors has today notified First Quantum that it has declined to pursue the proposal as it is not in the best interests of Inmet shareholders,” Inmet said yesterday.
This morning, First Quantum confirmed that it had approached Inmet on a friendly basis to “discuss a possible combination of the two businesses.”
First Quantum said that its proposal requested limited access to Inmet’s Cobre Panama development project.
“With [First Quantum’s] recent successful commissioning of the Ravensthorpe and Kevitsa mines, as well as the ongoing construction of First Quantum’s $1.72 billion mine at Sentinel, a project of similar size to the Cobre project, First Quantum’s project reputation and expertise is well established,” First Quantum stated. “We believed this would be useful in a combined company to the execution of the Cobre Panama.”
First Quantum chairman and CEO Philip Pascall expressed disappointment at Inmet’s rejection of the deal.
“The 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 a combination,” Pascall said.
“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.”