Vancouver — Regalito Copper (RLO-T, RLO-X) has entered a takeover bid agreement with suitor Pan Pacific Copper, which will offer US$6.00 per share for the company.
The cash offer, valued at US$137 million, will give Pan Pacific, a joint venture between Nippon Mining & Metals (66%) and Mitsui Mining & Smelting (34%), Regalito’s large namesake copper deposit in Region 3 of northern Chile.
The Regalito deposit hosts a measured and indicated resource of 628 million tonnes grading 0.43% copper, or about 6 billion pounds (2.7 million tonnes) of contained copper. An additional 131 million inferred tonnes at 0.41% copper was also reviewed, equating to about 1.2 billion pounds (540,000 tonnes) of the metal.
Based on measured and inferred resources, the offer equates to about US2.3 per pound of in-situ copper.
Company management has thrown it’s support behind Pan Pacific’s offer, a 17% premium over Regalito’s closing price prior to the news release on March 13, 2006, and a 12% premium over the prior month’s average closing price. Certain Regalito officers, directors and major shareholders, representing about 42% of the company fully diluted outstanding shares, have also entered a lock-up and support agreement with the Japanese consortium to not support any rival offer that is less than a 5% premium over Pan Pacific’s bid.
Shares of Regalito rallied to reflect the takeover bid, closing up 15% or 86, to close at $6.80 apiece on volume of 588,000.
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