First Quantum completes C$5.1 billion takeover of Inmet
On April 1, 2013, First Quantum Minerals Ltd. (First Quantum) successfully completed its takeover of Inmet Mining Corporation (Inmet). Inmet subsequently became a wholly owned subsidiary of First Quantum. With its acquisition of Inmet, First Quantum became one of the world's top widely-held pure-play copper producers with a portfolio of seven operating mines in Europe, Africa and Australia and development projects in Latin America, South America and Africa.
For more than 25 years, Torys advised Inmet on numerous strategic initiatives.Inmet's success in acquiring and advancing quality copper assets was instrumental in creating an attractive global copper mining company that produced substantial value for its shareholders.
First Quantum's acquisition of Inmet began with a proposal in late 2012. A timeline of key events in First Quantum's takeover of Inmet and additional background on Torys' relationship with Inmet is found below.
Takeover Timeline| October 28, 2012 First Quantum makes a proposal |
First Quantum approaches Inmet with a proposal to acquire all Inmet common shares for $62.50 per share payable in cash and First Quantum common shares, subject to an overall limit of 50% cash, 50% First Quantum shares and subject to due diligence, exclusivity and other conditions. The proposed offer is valued at $4.3 billion. After reviewing the first proposal and receiving advice from its financial and legal advisers, Inmet's Board declines the first proposal. | |
| November 25, 2012 First Quantum revises its proposal |
First Quantum raises its proposed acquisition price to $70.00 per share, subject to 50/50 cash and share limits and other conditions. The revised offer is valued at $4.9 billion. Inmet's Board declines the second proposal and implements a shareholder rights plan. | |
| December 18, 2012 First Quantum announces its intention to make an offer |
First Quantum publicly announces its intention to offer to acquire all Inmet common shares for $72.00 per share, subject to 50/50 cash and share limits and other conditions. The offer is valued at $5.1 billion. Inmet's Board establishes a special committee of directors to review and consider the terms of First Quantum's offer and to evaluate strategic alternatives. | |
| January 9, 2013 First Quantum makes a formal offer |
First Quantum makes a formal offer for all outstanding Inmet common shares on the terms announced in December. | |
| January 10, 2013 Inmet's largest shareholder supports First Quantum's offer |
Leucadia National Corporation, with approximately 15.9% of Inmet's common shares, announces its intention to tender to First Quantum's offer absent any changes in circumstances or new information. | |
| January 21, 2013 Inmet responds to First Quantum's offer |
Inmet mails its directors' circular recommending that its shareholders reject First Quantum's offer. | |
| February 27, 2013 Inmet waives its rights plan and grants access to its data room |
Inmet waives its shareholder rights plan and grants First Quantum access to Inmet's data room. | |
| March 21, 2013 First Quantum's offer succeeds |
After First Quantum's offer is extended several times, it acquires control of Inmet upon taking up the more than 85% of Inmet's outstanding shares tendered to the offer. Upon further extending the offer, more than 90% of Inmet's outstanding shares are tendered and First Quantum subsequently completes a compulsory acquisition transaction to obtain all remaining Inmet shares. |
Torys acted for Inmet on several of its mining acquisitions, including Inmet's 2005 acquisition of a 70% interest in the Cobre Las Cruces copper project in Spain and its 2010 acquisition of the remaining 30% of Cobre Las Cruces. Torys also played key roles in Inmet's acquisition and advancement of the US$6.2 billion Cobre Panama project, one of the largest undeveloped copper projects in the world.
Representative Cobre Panama Transactions on which Torys acted include:
- Inmet's successful unsolicited 2008 takeover of Petaquilla Copper Ltd., holder of a 26% interest in Cobre Panama, and its 2008 acquisition of an additional 26% interest in Cobre Panama from Teck Cominco Limited. The completion of these transactions resulted in Inmet owning 100% of the Cobre Panama project.
- From 2009 to 2012, Inmet's completion of a public offering of common shares, a private placement of subscription receipts to a subsidiary of Temasek Holdings (Private) Limited, and two U.S. private placements of senior notes. These transactions raised almost $3 billion in total, largely earmarked to fund the development of Cobre Panama.
- Inmet's 2009 option agreement with Korean companies LS-Nikko Copper Inc. and Korea Resources Corporation for a 20% interest in Cobre Panama and their subsequent exercise of the option in 2012.
- The development, beginning in 2010, of the procurement and contract documents for the engineering, procurement, construction and management of the Cobre Panama mine construction, power plant and process plant.
- Inmet's 2012 precious metals streaming transaction with royalty company Franco-Nevada Corp. pursuant to which Inmet sold future gold and silver production from Cobre Panama in return for US$1 billion of project financing.
- Inmet's 2013 negotiations with a potential strategic investor for a minority stake in Cobre Panama.