A wrench has been thrown into Vancouver mining magnate Lukas Lundin’s $9 billion merger with Inmet Mining (TSX:IMN).
On Monday, Toronto’s Equinox Minerals (TSX:EQN) made a hostile bid for the veteran’s namesake Lundin Mining (TSX:LUN) valued at $4.8 billion.
The deal would see Equinox buy Lundin for $8.10 per share, allowing the Zambia-focused copper producer to increase its annual production growth rate 23% over the next six years.
Equinox president and CEO Craig Williams said the combined entity would have a higher copper production profile in the near term compared with the proposed merger between Lundin and Inmet.
"This offer is clearly superior to the nil-premium merger proposed between Lundin and Inmet,” Williams said in a release. “We also believe that our offer presents an attractive option for Lundin shareholders to elect to receive cash or retain exposure to what we believe would be one of the strongest and lowest-risk production and growth profiles in the copper sector today."
Lundin, which is based in Toronto, issued a response Monday saying its board of directors was “reviewing and evaluating” the announcement with financial and legal advisors.
The company advised shareholders not to make any decisions until the board had made a recommendation.
The proposed takeover comes a month and a half after Lundin announced the merger with Inmet, an agreement valued at approximately $9 billion.
That deal would see the companies join forces to create an intermediate copper producer that would be called Symterra Corp. (See “Lundin, Inmet to merge in $9 billion deal” – BIV Business Today, January 13, 2010 http://www.bivinteractive.com/index.php?option=com_content&task=view&id=3630&Itemid=32.)
At press time, Lundin’s shares were up 19.3% to $7.70.