Lundin Mining Needs Acquirer Willing To Pay Big Premium: report
Lundin Mining Corp. ( LUN ), which lost almost half its value after spurning two takeover bids, now needs an acquirer willing to pay the biggest premium for a diversified minerals deal to make shareholders whole again, according to a Bloomberg report.
It said the copper producer's market capitalization has plunged $2.2 billion, or 42%, in about four months since rejecting a $4.8 billion bid from Equinox Minerals Ltd. and abandoning plans to sell itself after deeming offers to be inadequate. To recover the losses, Lundin would now have to find a buyer willing to pay a 71% takeover premium, making it the most expensive diversified-minerals deal greater than US$500 million, according to data compiled by Bloomberg.
Bloomberg said while bidders may still be lured by Lundin's stake in a copper mine in the Democratic Republic of Congo and a valuation cheaper than 97% of the Toronto-based company's rivals, Chairman Lukas Lundin may insist on a price exceeding Equinox's prior offer, according to Stifel Nicolaus & Co. Potential suitors now must weigh a 17% slump in copper prices and increasing signs the U.S. may fall back into a recession as stocks suffer the worst slump since the financial crisis, it said.
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