Minmetals Resources exits battle over Equinox
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Minmetals Resources Ltd, a unit of China's largest metals trader, withdrew its takeover offer for copper producer Equinox Minerals after Canada's Barrick Gold Corp made a higher bid.
Barrick's C$7.3 billion (US$7.7 billion) cash offer, or C$8.15 per share, was 16 percent higher than Minmetals Resources' bid which was made earlier this month.
''While we still consider the Equinox assets provide a good fit with MMR's strategy, the price offered by Barrick is above our most optimistic assessment of value,'' Andrew Michelmore, CEO of Minmetals Resources, said yesterday in a statement.
''Competing with Barrick at these prices would be value destructive for MMR's shareholders,'' he added.
In Hong Kong, shares of Minmetals plunged as much as 13 percent yesterday as trading resumed following a brief suspension in the morning pending the announcement. The stock closed 9.28 percent lower at HK$5.18 (67 US cents).
The board of Equinox has recommended its shareholders accept Barrick's offer.
Equinox, listed in Toronto and Sydney, operates the Lumwana copper mine in Zambia - its prized asset - and is constructing a copper-gold project in Saudi Arabia.
Minmetals Resources currently owns about 4.2 percent of Equinox.
''We will now turn our attention to other opportunities,'' Michelmore said.
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