Executives at Vancouver-based Copper Mountain Mining Corp. (TSX:CUM) say that a "highly conditional" and "untimely" unsolicited takeover bid from Taseko Mines Ltd. (TSX:TKO) undervalues the company's growth potential.
On Wednesday, Taseko, which is a major Copper Mountain shareholder, delivered a share-swap merger proposal to Copper Mountain's board.
That proposal valued Copper Mountain at a large premium to a $50 million brokered financing that Copper Mountain also announced Wednesday.
That brokered financing would net Copper Mountain less than $1.10 per share and will result in well over 130% dilution to its shareholders, according to Taseko.
"We believe the $1.15 brokered financing badly undervalues Copper Mountain and we were astonished that our offer was not properly responded to before the brokered deal was priced," said Taseko president Russell Hallbauer.
Taseko's offer includes an unconditional and immediate cash financing of $10 million at a similar price to what Copper Mountain got in its brokered financing.
Previously, Taseko had tabled a more conditional, $10 million, $2.20-per-share financing.
Copper Mountain responded Thursday that its board has concluded that it is not in the interest of shareholders to accept the Taseko proposal and that a better alternative is the $50 million brokered financing.
"Their approach of interfering with the company's financing could deprive our shareholders of substantial benefit," said Copper Mountain CEO Jim O'Rourke.
Copper Mountain's share price this week ranged between $1.26 and $1.41; 52-week high: $1.64; 52-week low: $0.31.