Mining acquisitions may be too rich
Looking at the hostile offer by Equinox to buy Lundin, The Globe and Mail reports that some of the recent mining deals may be beyond what the market will support:
On Tuesday, the day after a Lundin executive denounced Equinox’s hostile offer as having too much financial risk, rival miner HudBay Minerals Inc. lashed out against deals made simply to gain scale, calling them “very value destructive” – and he questioned the rosy outlook for base-metals companies.
“We are not in a super cycle, this is a cycle,” HudBay’s chief executive officer David Garofalo told investors. “When the central banks find religion on inflation again, the cycle will be over.”
Michael Allan McCrae wrote this story. You can contact him at [email protected].