Nevsun passes on Lundin’s $1.4 billion fresh takeover bid

The Timok copper-gold project in Serbia (Image courtesy of Nevsun Resources.)

Base metals producer Nevsun Resources (TSX:NSU) has once again dismissed a takeover offer by Lundin Mining (TSX:LUN), as it believes the Cdn$1.4 billion (about $1.1bn) bid ignores the fundamental value of the company and its assets.

Chief Executive Officer Peter Kukielski said Lundin’s notional takeover offer represents only a 13 % premium to Nevsun’s shares trading price, which closed Monday at Cdn$4.2. He recommended shareholders take no action on Lundin’s offer.

Nevsun’s response comes a day after Lundin made a new offer, the second in three months to buy the base metals miner.

The Vancouver-based company’s statement comes a day after Lundin said it was taking another run at Nevsun by turning its offer into a hostile one — It said it’d make the new all-cash offer directly to Nevsun shareholders.

Nevsun said that it had not yet received a formal offer. Should one be received, a special committee of independent directors would consider it with advisers before making a recomendation to the board and shareholders, it said.

Lundin first approached Nevsun on February 7, submitting a new proposal on February 25 and yet another on April 3, all of which were rejected. In May, Lundin partnered with Euro Sun Mining a roughly $1.5-billion takeover offer that was a combination of cash as well as shares in both Lundin and Euro Sun. That bid was also rejected.

Lundin and its partner are after Nevsun’s large high-grade Timok copper-gold project in Serbia as well as the company’s other key asset — the Bisha copper-zinc mine in Eritrea.

In 2016, Lundin tried and failed to buy Timok from previous owner Freeport McMoRan.