Australia clears Minmetals Resources proposed bid for Equinox

The Australian government has no objection to Minmetals Resources’ proposed acquisition of Equinox Minerals (EQN-T, EQN-A), the Hong Kong-listed company says.

Minmetals, whose largest shareholder is Beijing-based China Minmetals Group, said it had received written notice from Australia’s Foreign Investment Review Board on Apr. 5 stating that the agency would not block a takeover should it be approved by shareholders.

Minmetals proposes to offer $6.3 billion in cash for Equinox and finance it with a mixture of existing cash reserves, long-term credit facilities from Chinese banks, and equity including financial investments in Minmetals by Chinese institutions.

The proposed $7 a share cash bid for Equinox, unveiled over the weekend, represents a 23% premium to Equinox’s closing share price of $5.31 on Apr. 1 and a 33% premium to the twenty day volume weighted average trading price of Equinox shares to Apr. 1.

Minmetals is one of the world’s largest zinc producers and a substantial producer of copper, lead, gold, silver and bauxite with operations in Australia and Asia and advanced and early stage exploration assets across Australia, Asia and North America.

At presstime in Toronto Equinox was trading at $7.50 per share. Over the last year the company has traded between a high of $7.58 per share (Apr. 5 2011) and a low of $3.07 per share (May 20 2010). The company has about 877 million shares outstanding.