CANADIAN mining giant First Quantum Minerals has taken its bid for fellow miner Inmet hostile, as it yesterday sent takeover documents for its C$5.1bn (£3.2bn) offer directly to Inmet shareholders.
Vancouver-based First Quantum, which has assets in Africa, Australia, South America and Europe, last month sweetened its offer for Canadian miner Inmet, offering C$72 in a mixture of cash and shares for each Inmet share. This represents a premium of around 65 per cent, First Quantum said.
So far, Inmet has been resistant to First Quantum’s advances, and in November rejected a C$4.86bn proposal.
First Quantum is seeking to gain control of the Cobre Panama mine, an undeveloped copper project in Central America, which Inmet currently owns.
Last month, Inmet raised its proven and probable reserves at Cobre Panama, one of the few undeveloped deposits not owned by a mining major, by 27 per cent.
First Quantum – which does most of its engineering project management and construction work in house – said it can bring “significant improvements” to Cobre Panama, including developing the project at a lower expense.
“We are taking the significant step of making this proposal directly to Inmet shareholders and requesting their support for what, together, we know can be achieved,” First Quantum chief executive and chairman Philip Pascall said yesterday.
“We invite Inmet shareholders to participate in this vision and to become shareholders in this most exciting new venture.”
First Quantum said a combination of the two companies would create a “uniquely attractive, large, liquid and high growth copper focused copper company”, making it a new global leader in the base metal.
Peter Bacchus, joint head of European investment banking and global head of metals and mining at Jefferies, led the team advising Canadian First Quantum Minerals on its bid for Inmet.
He joined Jefferies from Morgan Stanley, where he was a managing director and global head of metals and mining investment banking, and previously held senior positions at JPMorgan and Citigroup.
Bacchus has led a number of high-profile transactions, including advising on Rio Tinto’s defence against BHP Billiton and Anglo American’s $523m (£326m) disposal of Tongaat Gulett in 2009. Over the years he has acted as adviser to various companies in the sector including Eurasian Natural Resources, BHP Billiton, Shell, BP, Vedanta and Glencore.
First Quantum was one of the long-standing clients of Jefferies’ Bacchus from when he used to work for Morgan Stanley.
Nordgold, spun out of Russia’s second-largest steel-maker Severstal, was one of the first new clients won by the Jefferies Hoare Govett investment banking team of which Bacchus was a leading light.
Bacchus started his career as a chartered accountant at Price Waterhouse after a period with the Foreign and Commonwealth office in the US.
Jefferies, a global securities and investment banking firm, has served companies and investors for nearly 50 years.