FREE ARTICLE PREVIEW: You are enjoying a free sample of exclusive
subscriber content. There is a limit of three free articles per week.

DAILY NEWS Sep 6, 2012 12:29 PM - 0 comments

Petaquilla soars on Inmet's takeover offer

TEXT SIZE bigger text smaller text
2012-09-06

Inmet Mining (IMN-T) is offering to buy Petaquilla Minerals (PTQ-T) for $112 million in cash and equity, which operates the Molejon gold mine adjacent to its Cobre Panama copper-gold project in Panama.

During afternoon trading, the news sent Petaquilla shares soaring 54% to 54¢ as over 15 million shares changed hands, pushing the price higher than Inmet's offer.

Under the bid, Petaquilla shareholders could receive either 48¢ in cash or .0109 of an Inmet share for each share held, representing a 37% premium to its Sept. 5 closing price or a 30% premium to its 20-day volume weighted average price.

The global miner says if all Petaquilla shareholders opt to receive Inmet shares, it would issue roughly 2.5 million shares or 3.5% of its shares pro forma the transaction.

If supported by Petaquilla’s board, Inmet intends to spin-out the latter’s Lomero-Poyatos assets in Spain to Petaquilla shareholders, adding to the attractiveness of the deal.   

Inmet believes the offer provides Petaquilla shareholders a substantial premium, an opportunity to retain potential upside of the Spanish assets and an alternative to the US$210-million high yield debt financing the company’s management proposed given its financial condition.

In return, the bid would give the Toronto-based producer control of Petaquilla’s Molejon gold mine, the Lomero-Poyatos assets, and a Panamanian infrastructure and mining service business.

While the latter two appear to add little value to Inmet, the Molejon mine would allow the producer to consolidate the district where it is developing its US$6.2-billion Cobre Panama project.

Inmet aims to continue operating Molejon and says once the mine is exhausted, Molejon’s workforce could join the Cobre Panama operation.  

The acquisition “does not appear expensive and may be of strategic value, but the timing and use of funds will likely not sit well with investors, given the large existing capex commitment to Cobre Panama,” writes BMO’s analyst Stephen Bonnyman in a note.

The offer, which Inmet plans to internally fund and won’t require the approval of its shareholders, comes on the heels of the company closing a US$1-billion financing deal with Franco-Nevada (FNV-T, FNV-N) to cover a funding shortfall at its 80%-held Cobre Panama project. Korean Panama Mining holds the remainder of the project, which is expected to come online in 2016.

For the bid to go through, Inmet would need the support of Petaquilla’s holders, representing at least 50.1% of outstanding shares on a fully diluted basis.

The transaction is also conditional on a few key terms, including the receipt of all regulatory approvals, no further financings or spin-outs by Petaquilla or material adverse changes.

Petaquilla shareholders will have at least 35 days after a take-over bid circular is mailed to vote on the deal.

Inmet also operates the Cayeli copper-zinc mine in Turkey, the Las Cruces copper mine in Spain, and the Pyhasalmi copper-zinc mine in Finland. 



© 1915 - 2014 The Northern Miner. All Rights Reserved.

Related News
True Gold quickly develops North Kao at Karma
A leaner Coeur Mining boosts returns
US markets struggle, Oct. 6-10
Related Press Releases
Petaquilla Minerals Ltd. Announces Expected Late Filing of Audited Annual Financial Statements
Franco-Nevada To Release Third Quarter 2014 Results
Franco-Nevada to Acquire a Gold & Silver Stream on Candelaria from Lundin Mining for US$648 million
 



Horizontal ruler
Horizontal Ruler

Post A Comment

Disclaimer
Note: By submitting your comments you acknowledge that Northern Miner has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Please note that due to the volume of e-mails we receive, not all comments will be published and those that are published will not be edited. However, all will be carefully read, considered and appreciated.

Your Name (this will appear with your post) *

Email Address (will not be published) *

Comments *



* mandatory fields