Lundin unequivocally rejects Equinox
The Age
Tuesday March 22, 2011
CANADA'S Lundin Mining has formally rejected Equinox Minerals $C4.8 billion ($A4.88 billion) offer for the company, advising its shareholders to be "wary" of the offer, which its says comes with "extensive conditions".The knock-back was widely expected by the market because Lundin has expressed its preference for an all-scrip, zero-premium merger with compatriot Inmet.Lundin chief executive Phil Wright said he was uncomfortable taking on the debt that Equinox proposes to finance the acquisition."Shareholders should be very wary of this offer and carefully review the information supporting it, or indeed the lack thereof," he said."Taking on $US3.2 billion in debt on partially undisclosed terms, and the basis of their production forecasts are two things in particular to reflect on."Perth-based Equinox first proposed paying $C8.10 or 1.2903 shares and 1 for every Lundin share in February.Mr Wright said a special committee, as well as its own adviser, Scotia Capital, had recommended that Lundin's board reject the offer.Lundin chairman Lukas Lundin said the Equinox bid was lacking on all levels. "The offer has such extensive conditions that even if the amount of the offer was not so financially inadequate, the board would not recommend that shareholders accept the offer because we have no confidence that it would ever close," he said.Lundin also said it had concerns about the geopolitical risks associated with Equinox's projects, including the Lumwana copper mine in Zambia.A source within Equinox told BusinessDay that Lundin's share price was trading just shy of the Equinox offer."Lundin shareholders are making their views clear," he said. "Ours is the only offer that provides a substantial premium and this doesn't change that."Lundin said it would soon provide more information about the Inmet deal, first agreed to back in January.
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