Stating that First Quantum (TSX:FM) bid fails to adequately compensate, Inmet Mining (TSX:IMN) told its shareholders to reject First Quantum's C$5.1 billion bid.
"The Inmet Board has concluded that the First Quantum Offer fails to adequately compensate shareholders for Inmet's low risk asset base and its strong prospects for growth and value creation at Cobre Panama, which has the potential to become one of the world's largest copper mines," writes David R. Beatty, chairman of Inmet's board in a news release.
"Cobre Panama is expected to drive a 176% increase in Inmet's copper production by 2018 and, as it moves closer to production, we believe our shareholders will benefit substantially from the commensurate increase in the company's valuation.
"The First Quantum Offer is timed to deprive them of that opportunity without fair compensation, all while adding considerable execution, financing and geopolitical risk to the proposed combined company. We believe our shareholders can do significantly better and we urge them to reject First Quantum's offer."
Negotiations between the two companies is fraught. Vancouver-based First Quantum said Inmet is trying to sabotage the takeover, while Inmet suggested its counterpart’s complaints were dishonest, mainly because the intention to sell a further stake in Cobre Panama had long been on the table.
First Quantum holds extensive copper, nickel and gold assets throughout Africa and Australia, while Inmet mines copper and zinc in Turkey, Spain and Finland.
If the two miners combined, the entity would have a projected output of 1.3 million tonnes per year by 2018.