Vancouver-based Nevsun Resources Ltd. on Tuesday urged shareholders to ignore a potential $4.75 cash per share hostile takeover offer from Toronto-based Lundin Mining Corp., and the chief executive has already signalled how his company may respond when an actual offer materializes.
In a press release, Nevsun chief executive Peter Kukielski said “several strategic parties” have expressed interest in participating as it seeks to build its copper-gold mine in Serbia, known as Timok, raising the prospect that his company could sell a stake in the asset, or strike a joint partnership with another company, which would complicate Lundin’s takeover offer.
The proposed deal came back into the news after Lundin Mining on Monday announced it intends to bid approximately $1.4 billion for Nevsun, at $4.75 per share, and plans to release a formal offer by the end of the month. In May, Lundin sought to purchase only Timok, and enlisted Euro Sun Mining Inc. to purchase Nevsun’s other main asset, a zinc-copper mine in Eritrea known as Bisha.
But Nevsun rejected the overtures and a formal offer was never put forward. Now Lundin is seeking to buy Nevsun outright, noting changes in Eritrea’s political landscape contributed to its change in strategy.
Nevsun soared nearly 14 per cent higher in Toronto at $4.78 per share on Tuesday afternoon. Lundin edged 1.7 per cent higher to $7.6. Neither Lundin nor Nevsun would provide comment, and instead issued press releases that contained comments from their respective chief executives.