March 8 (Bloomberg) -- Inmet Mining Corp., which is trying to fend off a C$5 billion ($4.9 billion) hostile takeover bid from First Quantum Minerals Ltd., said it’s in “constructive” talks to sell a stake in its Cobre Panama copper project.
Inmet is in discussions with a potential strategic investor to sell a share of the planned Panamanian mine at “a significant premium to the value implied by the First Quantum offer,” Toronto-based Inmet said today in a statement.
Absent an improved bid from First Quantum, pursuing Inmet’s current plans will create more value for shareholders, Inmet said. The company is still recommending that investors reject First Quantum’s cash-and-stock offer as too low.
The bid is due to expire at 11:59 p.m. Toronto time on March 11. Vancouver-based First Quantum said today it got approval for the deal under the Investment Canada Act.
Gaining control of Cobre Panama would enable First Quantum to create one of the world’s five largest copper producers. Inmet plans to spend about $6.2 billion constructing the mine, which is scheduled to produce an average of 266,000 tons a year of the metal.
First Quantum took its bid directly to Inmet shareholders Jan. 9 after Inmet’s board snubbed two earlier offers. The latest offer comprises C$72 a share in cash or a mixture of cash and stock, with a maximum cash consideration of about C$2.5 billion.
The bid is currently valued at C$69.66 a share, according to data compiled by Bloomberg. Inmet rose 1.2 percent to C$68.52 in Toronto while First Quantum climbed 6.2 percent to C$20.42.
Goldman Sachs Group Inc., Jefferies Group Inc. and Royal Bank of Canada are advising First Quantum. Canadian Imperial Bank of Commerce is advising Inmet and Scotiabank is financial adviser to the special committee of the Inmet board.
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