September 5, 2018
China’s Zijin Mining Group Co. will buy Canadian gold and copper miner Nevsun Resources Ltd. for about $1.86 billion, the companies jointly announced today, after Nevsun rejecting multiple bids from rival Lundin Mining Corp.
Zijin Mining, which specializes in gold, copper and zinc, will offer $6.00 per share in cash for Nevsun, the companies told Reuters, representing a premium of about 21 per cent to Nevsun’s close in Toronto on Tuesday.
Lundin took its all-cash offer of $4.75 per share directly to Nevsun shareholders on July 26, after its five previous proposals were rejected by the company.
After rejecting Lundin’s offer, Nevsun said in August it had entered into confidentiality agreements with 18 interested parties, and had received four proposals from mining and smelting companies, indicating their willingness to purchase up to a 19.9 per cent stake in Nevsun.
Zijin’s offer is subject to a minimum tender requirement of two-thirds of Nevsun’s shares, they told Reuters.
Zijin will have to pay a termination fee of $50 million to Nevsun in certain circumstances, including failure to receive approval from Chinese authorities, according to the statement.
Zijin will be eligible for a termination payment of $50 million if Nevsun accepts a superior offer.