Minmetals looks to raise US$860m as it pursues takeover

PUBLISHED : Tuesday, 19 April, 2011, 12:00am
UPDATED : Tuesday, 19 April, 2011, 12:00am


Minmetals Resources, which is in the middle of a takeover battle for a Canada and Australia-listed miner operating mainly in Africa, aims to raise up to US$860 million by selling new shares.

Minmetals Resources, a Hong Kong-listed unit of China's largest non-ferrous metals trader China Minmetals Corp, offered investors 1.11 billion to 1.2 billion of its shares at HK$5.20 to HK$5.60 each yesterday afternoon, a term sheet said.

The price range represents a 4.9 per cent to 11.7 per cent discount to the closing price of HK$5.89 before trading was halted in afternoon trade pending the share sale.

The company has an option to increase the share issue by US$200 million if demand exceeds the offered number of shares.

BOC International, Citi, Credit Suisse, Deutsche Bank, Macquarie and Morgan Stanley are the placing agents.

Minmetals is one of China's largest importers of alumina, which is refined from bauxite and smelted into aluminium, used in the packaging, construction, vehicle and aircraft equipment industries. On December 31, it completed the US$1.85 billion acquisition of a portfolio of zinc, copper, lead, silver and gold mining projects in Australia, Laos and Canada from its parent.

Its parent bought the assets in 2009 from Australia's OZ Minerals for US$1.4 billion.

Minmetals Resources chief executive Andrew Michelmore said last month it would sell its trading and processing assets to focus on mining.

Early this month, it launched a US$6.5 billion hostile takeover offer for all of Sydney and Toronto-listed Equinox Minerals, at an offer price of C$7 (HK$57) per share. Equinox has copper assets in Zambia in southern Africa and Saudi Arabia.

Equinox's board suggested its shareholders do not accept the offer, calling it 'lowball', but Minmetals Resources said it will take its offer directly to Equinox's shareholders.

Separately, Equinox had been seeking to acquire a Canadian rival, Lundin Mining, which mines in Portugal, Sweden, Spain and Ireland.

Minmetals Resources urged Equinox shareholders to vote against the proposed takeover of Lundin.

Its share price has lost 12.4 per cent since it offered to take over Equinox.

Gauging demand

Minmetals has an option to increase the share issue by US$200 million

The share price range represents a discount of up to this much on the closing price yesterday of HK$5.89: 11.7%