Minmetals confirms deal for Noranda

A consortium led by state-owned China Minmetals Corp appears to have trumped at least three other bidders for Canadian miner Noranda by making an attractive cash offer.

Minmetals through an agent yesterday confirmed the two parties struck an 'exclusivity agreement' on Friday, with the due diligence process now underway.

According to sources, the Minmetals group out-bid three other contenders for Noranda, but the consortium's cash offer was the highest.

'Other offers were a mixture of cash and equity, but what we offered is all cash. None of them could match us on this,' the source said.

On top of the 100 per cent cash offer, Minmetals was willing to offer a 'moderate' premium of less than 10 per cent to Noranda's peak-cycle market value, the source said.

As part of the transaction, Minmetals would acquire the entire issued share capital of Noranda but the Canadian miner's aluminium business will be spun-off and redistributed to Noranda's existing shareholders.