FIRST Quantum Minerals’s hostile C$5.1bn (£3.2bn) takeover bid for Inmet Mining took a tense turn over the weekend, as the Canadian base metal miner delivered a letter to its rival suggesting Inmet may be trying to scuttle the bid, which is now in the hands of shareholders.
The letter, addressed to Inmet’s board chairman David Beatty, said several large shareholders of Inmet had approached First Quantum to express concern that the smaller company could be shopping around a minority interest in its Cobre Panama copper project in Central America.
“These concerns are apparently based upon discussions with a senior executive officer of Inmet,” said First Quantum chief executive Philip Pascall in the letter to the public.
Inmet holds an 80 per cent stake interest in the Panamanian project, which is one of the world’s largest undeveloped copper deposits. The company has already sold a precious metal stream to help fund the $6.2bn development. By selling an additional stake in Cobre Panama, Inmet would make itself less appealing as a takeover target, said Pascall, implying the move was tantamount to sabotage.
Beatty described the letter as “plainly hostile and counterproductive” in a statement released on Saturday.
First Quantum is being advised on the deal by Jefferies International, Goldman Sachs and RBC Capital Markets, while Inmet is being advised by CIBC World Markets.
City A.M. Reporter