‘Significant risk’ associated with Equinox offer, Inmet says
Inmet Mining is holding firm on the proposed friendly merger with Lundin Mining, saying there are significant risks associated with the hostile Equinox offer for Lundin announced last week.
Inmet continues to believe the proposed merger of equals between Inmet and Lundin to create Symterra provides superior benefits to shareholders of both Inmet and Lundin without the risks associated with the Equinox offer, Inmet stated on Thursday.
“The Equinox offer for Lundin is a high-risk, low-reward proposition, due to excessive debt, lack of strategy on future asset development plans, questionable growth projections and significant execution risks for Lundin shareholders,” said Inmet CEO Jochen Tilk. “Symterra [the newly merged company] will be a financially strong company with an excellent production base, strong leverage to copper and tremendous growth potential. Symterra will be a vehicle for real value creation that will generate benefits for shareholders from day one.”
Inmet goes on to say that the bid by Equinox, which offers an 8% premium on Lundin’s shares, does not take into account the risks in the transaction, including financing, transaction and closing costs.
Equinox has bid CAD$4.8 billion in a challenge to Inmet Mining’s friendly merger with Lundin, but needs a $3.2 billion bridge loan.