MELBOURNE (Reuters) – Australia’s South32 Ltd has bid $1.3 billion to take full control of Arizona Mining, offering a hefty premium for the Toronto-listed firm which is developing zinc, lead, manganese and silver assets.
The offer of C$6.20 per share was pitched at a 50 percent premium to Arizona’s last close and implies a total equity value for Arizona Mining of $1.6 billion, South32 said in a statement. The Australian firm already holds a 17 percent stake in Arizona.
The directors of Arizona Mining, which owns the Hermosa Project in Arizona near the border with Mexico, unanimously recommended that shareholders vote in favor of the transaction, South32 said.
South32 chief executive Graham Kerr said the company has actively participated in the Hermosa Project and has a deep understanding of the high grade resource and surrounding area which has similar geology to its Australian Cannington mine.
The large premium suggested South32 is eager to close the deal straight away, said analyst David Lennox of Sydney based advisor Fat Prophets.