Nevsun Resources Ltd. is urging its shareholders to reject Lundin Mining Corp.’s $1.4-billion takeover offer, claiming it is too low and arguing that superior bids are likely to surface soon, now that the company has started a strategic review.
Late last month, Toronto-based Lundin took its $4.75 formal all-cash offer directly to Nevsun shareholders, after a number of its earlier informal proposals were rebuffed. “They’re being opportunistic,” Peter Kukielski, chief executive of Nevsun, said in an interview.
“They know what this company is worth and that’s why we fully expect that superior offers will emerge.” He declined to specify how much he believes Nevsun is ultimately worth, but said its value is “far in excess of what Lundin has offered.”
Lundin’s interest in Nevsun was first made public in May, when the miner tabled a cash and stock proposal worth $5 a share, in conjunction with a junior partner, Euro Sun Mining Inc.
At the time, Vancouver-based Nevsun said it wanted a cash-only offer and no involvement from Euro Sun. Lundin eventually ditched Euro Sun and came back with an all-cash offer worth $4.75, which was still rejected on valuation grounds.