Ludin Mining has asked its shareholders to reject the Canadian $4.7 billion bid made by Equinox Minerals saying that the offer is under valuing the company and is considered too uncertain. Ludin Mining said that the debt financed takeover bid from the company was financially inadequate and highly risky.
Equinox Minerals would need to take a $ 3.2 billion loan on partially undisclosed terms to make the takeover bid a reality. While its main asset is the Lumwana copper mine in Zambia and its production forecasts are good the debt would make the deal risky. Lumwana is one of the largest new copper mines that has been developed in recent years. Equinox Minerals gave no response to Ludin Mining’s recommendation to its shareholders.
The Vancouver based company, Ludin Mining is already in talks with Inmet Mining to create a new base metals company by the name of Symterra. Under the current terms of the deal Inmet Mining would hold 53% of the new company formed and Ludin Mining the remaining 47%. The approval of two thirds of the shareholders of both companies is still required to make it official.
Ludin Mining operates in Portugal, Spain and Sweden besides the Democratic Republic of Congo. It produces copper, nickel, lead and zinc. On the other hand Inmet Mining, which has projects operational in Turkey, Spain and Finland, tends to produce copper, zinc and gold. The two companies when merged will make a very strong and viable entity.