Stock Watch – Hudbay Minerals Extends Augusta Offer For Final Time
Stock Watch > HBM > HudBay Minerals Inc. (TSE:HBM, Mkt cap 1.71B, P/E – , Div/yield 0.01/0.23, EPS -0.59, Shares 193.01M) has announced a “final extension” of its unsolicited offer to take over smaller copper-mine developer Augusta Resource Corp, valuing the company at $540 million.
With the offer, which is now valid until 5 May, Hudbay seeks to acquire the Rosemont Mine developer at a price of 0.315 of a Hudbay common share for each share in Augusta. In response, Augusta’s management recommended that shareholders do not accept the offer, saying it was financially inadequate.
The Toronto-based company, which already holds around 16% of Augusta’s outstanding shares, said that the offer would not be extended beyond 5 May unless the remaining conditions have been met by that time. That includes Augusta’s shareholder-rights plan being waived, invalidated or cease-traded. It’s interesting to note that this plan was approved last year with the specific purpose of fending off Hudbay’s acquisition attempts, the Arizona Daily Star commented.
Hudbay, which is planning to apply the British Columbia Securities Commission in an effort to cease-trade Augusta’s shareholder-rights plan, still considers that its bid offers “full and fair value” to its target. According to Hudbay, the strategic review process implemented by Augusta’s management to find alternatives to its offer eventually failed. Hudbay claims that Augusta shareholders face the risk of value erosion and dilution if it remains a stand-alone entity, resulting from uncertain permitting timelines and financial challenges that might occur in the short term.
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