Lundin Mining launches $ 1.4 billion hostile bid for Nevsun

TORONTO (Reuters) – Lundin Mining Corp. (19459003) LUN.TO launched a $ 1.4 billion ($ 1.1 billion) hostile takeover bid on Canadian mining colleague Nevsun Resources Ltd ( NSU.TO ) Thursday , saying that he had failed to convince Nevsun 's board of directors to reach a friendly deal in the past nine months. In a direct speech to Nevsun shareholders for his bid of C $ 4.75, Lundin said in a circular that it had become clear over time that Nevsun management was reluctant to accept a deal, despite several attempts to respond to his concerns.

"Whenever we have submitted a proposal, the goal has changed," said Lundin's CEO, Paul Conibear, during a conference call Thursday.

After the markets closed on Wednesday, Lundin unexpectedly stated that Conibear, 61, would retire at the end of the year and would be replaced by the company 's chief financial officer.

The announcement of a new CEO on the eve of the launch of his hostile bid might suggest that there is an internal debate in Lundin about the deal, said Adrian Day. Asset Management, tenth largest shareholder of Nevsun.

"One can not help wondering if Mr. Conibear, who is by no means an elderly man, is taking part in the acquisition," Adrian Day said. , whose fund holds about 3.3 million shares.

"I found the moment remarkably surprising.I would have thought that if it had been in the works, they could have implied it."

Lundin, based in Toronto, made five unsuccessful attempts to acquire the great copper and gold project of Nevsun in Serbia, but did not offer to buy his other badet, a mine in Eritrea, until now.

Nevsun rejected Lundin's proposals as inadequate, most recently in May when Lundin was badociated with the tiny Euro Sun Mining ( ESM.TO ), which allegedly acquired the Eritrean mine, in a stock and cash proposal about 1.5 billion Canadian dollars.

Lundin said on June 16 that his best option was a direct offer to Nevsun shareholders to buy the entire company, noting a significant political change in Eritrea in his press release.

Eritrea and Ethiopia signed a peace agreement this month ending decades of hostility and war provoked by the independence and secession of the country. Erythrea, 1993.

Nevsun, of Vancouver, advised shareholders not to make recommendations within 15 days.

Nevsun shares, which ended Wednesday at C $ 4.76, were trading at C $ 4.80 on Thursday, suggesting investors believe a more advantageous bid is on the way.

Nevsun previously stated that Lundin's offer of $ 4.75 CAD undervalues ​​its badets, highlighting recent improvements to its Eritrean mine and a study on the Timok Upper Zone that places the $ 1 billion mark. net badets of $ 1.82 billion.

Several "strategic partners" have expressed interest in working with Nevsun on future development, Nevsun said Thursday, without identifying these companies.

The Lundin offer, open until November 9, requires the support of more than 50% of Nevsun's stock. Lundin plans to finance the purchase with $ 1.5 billion in cash and an unused credit facility.

Analysts have said that Timok could attract large diversified companies, such as Rio Tinto ROI.L ROI.L, but it is unlikely that another mid-level Canadian miner would compete with the company. Lundin's offer.