Hong Kong-based base metals company Minmetals Resources (HKSE:1208) hopes to make a takeover bid for Equinox Minerals, an international mining company that is dual listed in Canada and Australia. The bid from the Chinese company may put the target’s hope to acquire Ludin Mining into jeopardy.
Minmetals Resources presently owns 4.2 % of Equinox Minerals and has offered a Canadian $7 per share offer to Equinox Minerals but this is conditional on the termination of its bid for Ludin Mining.
Ludin Mining recently decided to opt out of a merger with Inmet Mining to form a new company as it said the two were unable to reach a satisfactory consensus. The hostile bid from Equinox Minerals for Ludin Mining was at Canadian $4.8 per share and had been rejected by the Ludin Mining board of directors as being inadequate.
Equinox Minerals are a Zambia focused copper mining company. With the rising demand for the mineral in Asia, especially China the battle to control these natural resources is intensifying. That is why the Hong Kong listed Minmetals Resources’ Canadian $6.3 billion cash offer for the attractive copper miner is not a huge surprise.
Minmetals Resources chief executive Andrew Michelmore said that for Equinox Shareholders, the offer is compelling in that it not only provides a substantial premium and certainty of value, but it also provides a superior alternative to the proposed acquisition by Equinox of Lundin Mining.
In response to the unsolicited offer Equinox Minerals has said that its board would be meeting to consider the proposal and they would only comment on it after careful consideration. The shares in the company have risen on the stock market after the proposal was made.