Vancouver mining tycoon Lukas Lundin is heading back to the market in search of a better deal for Lundin Mining (TSX:LUN) after the company called off a $9 billion merger with Inmet Mining (TSX:IMN) Tuesday.
“Having agreed to terminate with Inmet, we can now pursue alternatives to significantly improve shareholders value and get a proper premium if we do a change of control transaction,” Lundin said.
“I am not against selling, if it achieves an excellent financial return to shareholders, but I will not support selling at bargain prices.”
The friendly merger between the companies was announced in January in an attempt to create an intermediate copper producer.
But it was complicated last month when Equinox Minerals (TSX:EQN) launched a hostile $4.8 billion takeover aimed at Lundin.
Lundin, which mines copper, zinc, lead and nickel, attempted to block the takeover attempt, advising shareholders the merger with Inmet was the better deal.
But the agreement started to crumble last week after it was revealed that changes needed to be made at Inmet’s key development project, Cobre Panama.
On Tuesday, Lundin and Inmet agreed to mutually terminate the merger agreement.
Lundin then adopted a shareholder rights plan to protect it from hostile takeovers while it considers “strategic alternatives.”
“This plan has been put in place to ensure that we have adequate time to explore all alternatives to bring value to Lundin shareholders,” commented Phil Wright, Lundin’s president and CEO.
On Wednesday, Equinox issued a statement urging Lundin shareholders to support the takeover attempt, and calling the rights plan a “delay tactic.”
“Our offer has always been and remains the clear and compelling choice for Lundin shareholders,” Equinox president and CEO Craig Williams said.
Lundin, meanwhile, has continued to oppose the bid, claiming that the offer is financially inadequate and would increase geopolitical risks for the company because Equinox has assets in Zambia and Saudi Arabia.
Lundin has also questioned the experience of Equinox’s management team.
At press time, Lundin shares had posted the highest volume of trading on the Toronto Stock Exchange Wednesday, totalling 13.2 million.
The company’s stock was up 6.6% to $8.09.