Vancouver — Regalito Copper (RLO-T, RLO-X) has entered a takeover bid agreement with suitor Pan Pacific Copper that 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 northern Chile’s Region 3.
The Regalito deposit hosts a measured and indicated resource of 628 million tonnes grading 0.43% copper, or about 6 billion lbs. (2.7 million tonnes) contained copper. An additional 131 million inferred tonnes at 0.41% copper was also reviewed, equal to about 1.2 billion lbs. (540,000 tonnes).
Based on measured and inferred resources, the offer equates to about US2.3 per lb. of in situ copper.
Company management has thrown its support behind Pan Pacific’s offer, a 17% premium over Regalito’s closing price prior to the news on March 13, 2006, and a 12% premium over the previous month’s average closing price. A group of Regalito officers, directors and major shareholders, representing about 42% of the company’s 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 on the takeover bid, gaining 15% or 86, to close at $6.80 apiece on TSX trading.
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