The board of Australian explorer Tethyan Copper (TYCFF-O, TYC-A) is recommending shareholders accept a takeover bid from Chilean copper producer Antofagasta (ANTO-L), which replaces an earlier joint-venture agreement.
The new takeover bid, supported by Barrick Gold (ABX-T, ABX-N), offers A$1.20 per share for Tethyan, valuing the company at A$190 million (US$140 million). It peels off a half-interest in the large Reko Diq porphyry-copper deposit in western Pakistan, which goes to Barrick for US$100 million.
Antofagasta has placed a condition of 90% of the shares being tendered on its offer. It also needs the approval of Australia’s Foreign Investment Review Board.
A previous deal to extinguish the back-in right held on Reko Diq by BHP Billiton (BHP-N, BLT-L) has also been revised, with Antofagasta changing its US$50-million offer to US$60-million, conditional on the takeover bid’s success or at Antofagasta’s option.
Barrick’s payment thus covers half the takeover bid plus half the payment for the BHP back-in right.
Tethyan’s former parent company, Western Australian nickel producer Mincor (MCR-A), has already agreed to tender a 12.5-million-option position it holds in Tethyan to the bid. Tethyan has signed up to a A$1.9-million break fee for Antofagasta if the board recommends another offer.
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