Nevsun CEO says several companies expressed interest in purchasing miner
TORONTO Nevsun Resources Ltd. says companies in China, Japan and Western countries are among “several” potential white knights that have expressed interest in buying the miner as it seeks to ward off a hostile takeover by Lundin Mining Corp.
“Several companies have indicated an interest,” Nevsun Chief Executive Officer Peter Kukielski said Thursday in a phone interview. The potential suitors are a variety of sizes and span the globe. Other parties are interested in acquiring a minority interest, he said.
Vancouver-based Nevsun said earlier on Thursday in a statement
it began a strategic review to consider alternatives to Lundin’s hostile takeover bid and urged shareholders to reject that offer. They have until Nov. 9 to tender shares.
Lundin formally launched a hostile takeover bid last month, arguing deep pockets will be required to develop the Timok copper-andgold project in Serbia and the Bisha mine in Eritrea. Toronto-based Lundin has been trying to acquire the company since October.
Under Lundin’s bid, Nevsun shareholders would receive $4.75 in cash for each Nevsun share tended. That represents an 82 per cent premium to the closing price of $2.61 on Feb. 6, the date it first proposed taking over the company.
Nevsun shares closed in Toronto at $4.93 on Wednesday, giving it a market value of $1.49 billion.
In addition to undervaluing the portfolio, Lundin’s latest bid is lower than previous transactions it proposed, and also lower “than other alternatives which are expected to emerge,” the company said in the statement.
Kukielski declined to say what he thinks the company is worth, saying its value would “crystallize” over the course of the strategic review. “Maybe it’s worthwhile my pointing out to you that the consensus target price of analysts for Nevsun is C$5.88 a share,” he said.
As of Thursday, the average 12-month target price for Nevsun
was $5.62 a share, according to data compiled by Bloomberg.
Nevsun has been looking at financing alternatives for development of Timok since March 2017, and has received four proposals from mining and smelting companies
to buy as much as a 19.9 per cent equity interest in Nevsun, as well as proposals to partner on Timok’s development. Three of these are at a premium to the per share price offered by Lundin, it said.