Augusta Resource Corp. (AZC), the developer of the Rosemont copper mine, rejected a C$343 million ($309 million) unsolicited bid from Canada’s HudBay Minerals Inc. (HBM) as too low and said it’s pursuing other “value-maximizing” options.
Augusta directors, executives and four other shareholders holding a combined 33 percent stake in the Vancouver-based company won’t tender their shares to HudBay’s offer, Augusta said today in a statement.
HudBay, which already owns 16 percent in the company, said Feb. 9 it will pay 0.315 of a share for each of Augusta’s. Its offer is currently valued at about C$2.75 a share. Augusta fell 1.4 percent to C$3.53 in Toronto.
Augusta said today the timing of the offer is “opportunistic” because the company is at an “inflection point” as it’s close to obtaining the necessary permits for Rosemont and completing construction. Announcing its bid last week, HudBay said Augusta’s management is being “overly optimistic” about the timeline for finishing work on the Arizona mine.
Scotia Capital Inc. and TD Securities Inc. are Augusta’s financial advisers and Davies Ward Phillips & Vineberg LLP and Cravath, Swaine & Moore LLP are its legal advisers. BMO Capital Markets and GMP Securities LP are HudBay’s financial advisers while Goodmans LLP and Milbank, Tweed, Hadley & McCloy LLP are its legal counsel.
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