Stock Watch – HudBay waived a condition of its bid that two-thirds of Augusta’s stock had to be tendered for the transaction to close.
Canadian mining corporation HudBay Minerals Inc. (TSE:HBM, Mkt cap 1.98B, P/E – , Div/yield 0.01/0.19, EPS -0.59, Shares 193.01M) has announced yet another extension of its hostile bid to take over smaller copper-mine developer Augusta Resource Corp.
The offer for the developer of the Rosemont copper-molybdenum project near Tucson, Arizona, was due to expire last Friday but has now been extended until May 27.
The Toronto-based company, which already owns around 16% of Augusta’s issued and outstanding common shares, has offered 0.315 of a Hudbay share for each share of Augusta. That values the target at some $458 million, or $3.15 per share, based on stock prices on Friday when Augusta shares closed at $3.01 on the Toronto Stock Exchange.
Earlier in May, the British Columbia Securities Commission (BCSC) ruled that it would allow Augusta to leave its shareholder rights plan in place until July 15 if the Hudbay bid is extended to July 16. Augusta approved its shareholder rights plan last year, after Hudbay bought a significant stake in the company. The target’s shareholders reaffirmed the plan at its annual meeting, chiefly in an effort to head off Hudbay’s buyout attempts.
With the BCSC decision, Augusta will have more time to find alternatives to Hudbay’s offer. The company stated recently that it had signed confidentiality agreements with ten possible investors as part of its strategic review process.
In March, Hudbay waived a condition of its bid that two-thirds of Augusta’s stock had to be tendered for the transaction to close.
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