Minmetals makes $1.3-billion takeover offer for Anvil Mining

MONTREAL – Copper producer Anvil Mining Ltd. (TSX:AVM) has received a $1.3-billion friendly takeover offer from Minmetals Resources, part of a vast China-based mining group that’s been on the hunt for base metal producers.

The Minmetals offer of $8 per share cash is a 38 per cent premium to Anvil’s market price of $5.79 at the end of trading Thursday prior to the announcement.

Minmetals will have the right to match any unsolicited superior offer made to Anvil and could receive a break fee of $53 million if the acquisition isn’t completed in some circumstances.

Minmetals, a Hong Kong-listed company that has its management team based in Australia, has also agreed to pay a $20-million fee to Anvil in certain circumstances such as a rejection of the deal by Minmetals shareholders.

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Its majority shareholder is China Minmetals Nonferrous Co., Ltd., part of the China Minmetals group, which has its headquarters in Beijing and 168,000 employees worldwide.

“An acquisition of Anvil meets MMR’s investment and strategic growth objectives and offers Anvil shareholders compelling value for their shares,” Minmetals chief executive Andre Michelmore said in a statement.

“MMR’s aim is to build an international mining group based on a unique operating model that brings together the skills and experience of an international management team with the long term commitment of a major Chinese corporation as its major shareholder.”

Minmetals had previously attempted to buy Equinox Minerals Ltd. earlier this year, but was muscled aside by Barrick Gold Corp. (TSX:ABX) which made a $7.3-billion friendly bid for the Canadian-Australian copper company.

Minmetals’ hostile takeover offer for Equinox had been $6.3 billion, prior to Barrick’s appearance on the scene.

In this case Anvil, an Africa focused base metals mining and exploration group, is welcomng Minmetals. Its board is recommending shareholder tender to the offer and its largest shareholder, Trafigura Beheer BV, has agreed to support the deal.

Anvil has a 95 per cent interest in the Kinsevere project and a 70 per cent interest interest in the Mutoshi project, both in the Katanga province of the Democratic Republic of Congo.

There are several conditions to the Minmetals offer, including that at least two-thirds of Anvil’s shares be tended to Minmetals.