Nevsun Resources and Zijin Mining Group Co. announced today that both parties signed a final agreement according to which Zijin, a company recently selected as a strategic partner of RTB Bor, has submitted a bid to take over Nevsun’s shares for 6 Canadian dollars per share, in cash.
The offer is worth 1.88 billion Canadian dollars or USD 1.41 billion.
Zijin, which also has ventures with Canada’s Barrick Gold and Ivanhoe Mines, said it plans to rapidly develop Nevsun’s high-grade Cukaru Peki mine in Timok region of Serbia. .
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On Friday, Zijin emerged as the top bidder for a 63 percent stake in Serbian’s RTB Bor copper complex, near the Timok deposit, after pledging a $1.26 billion investment in the operation.
Vancouver-based Nevsun, which rejected multiple Lundin bids as inadequate, is recommending that shareholders accept Zijin’s C$6.00 per share cash offer, 26 percent above Lundin’s C$4.75 a share cash bid. Lundin, which took is C$1.4 billion bid directly to shareholders in July after earlier informal proposals were rejected, declined to comment on the matter. Nevsun shares were up 17 percent in early trade at C$5.80 on the Toronto Stock Exchange and Lundin shares added about 2 percent to C$6.26.
“Although scarcity of copper development acquisition projects may entice Lundin to increase its offer, we believe Lundin is unlikely to proceed with a revised offer given the current price tag,” Credit Suisse analyst Anita Soni said in a note to clients.
In August, Nevsun said it would consider all strategic alternatives, including alternative buyers and four proposals from mining and smelting companies for investments of up to 19.9 percent in the company.
Zijin’s offer requires a minimum tender of two-thirds of Nevsun’s shares and includes a $50 million break fee for both companies if the deal does not consummate for various reasons. Zijin has the right to match any competing offer.
Antic: This is good for Serbia
Serbian Minister of Mining and Energy Aleksandar Antic assessed today that Zijin’s bid for the takeover of Nevsun is good for Serbia, the development of Serbian mines and the Bor region.
“We were informed by Zijin and Nevsun that the offer was submitted. Of course, considering that this is a proposal that has yet to be analyzed and accepted by shareholders, I would not like to comment on the transaction itself, because this is a matter between the two companies”, said Antić, Tanjug reports.
Antić said that Zijin’s offer was yet another proof of how much that company was developing. He added that it was especially important for Serbia that Zijin demonstrated how important our country was in their investment plans and how serious they were about staying in Serbia long-term.
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