Dealmaking activity among mid-cap mining companies is starting to pick-up.
Six weeks after Oz Minerals launched a $330m offer for Avanco Resources, a Brazilian-focused copper company, news of another takeover has emerged.
Lundin Mining and Euro Sun have joined forces to make a $1.1bn bid for Nevsun Resources, a Canadian listed miner with copper projects in Africa and eastern Europe.
They want to break-up the company with Euro Sun taking Nevsun’s Bisha mine in Eritrea and Lundin the Timok copper project in Serbia. However, their joint bid of C$5.00 a share in cash and shares has been rebuffed.
“Mergers and acquisition [activity] appears to be building up in the mid-cap mining space,” said analysts at Investec in a note.
The flurry of dealmaking activity underscores the attractiveness of copper, where demand is poised to outstrip supply due to a lack of new mining projects.
Lundin’s chief executive Paul Conibear said the company and Euro Sun were still keen to complete a deal. Nevsun shareholders have been offered a mixture of Euro Sun and Lundin shares as well as cash.
“After months of attempting to reach an agreement, we are disappointed that Nevsun has prevented its shareholders from considering our premium proposals and at this point in time, we believe that all Nevsun shareholders should be made aware of this opportunity,” he said. “We remain fully committed to negotiating a transaction with Nevsun under the very attractive terms proposed.”
Lundin, which is chaired by billionaire businessman Lukas Lundin, has been scouring the market for potential acquisitions in the $1bn to $3bn range.
“We believe this is a solid project that would fit well within Lundin’s portfolio of assets and give it attractive medium-term growth and long-term optionality,” said analysts at Berenberg in a note to clients.
Source: FT.com
