Equinox Minerals (EQN-T, EQN-A) announced today that Institutional Shareholder Services, an independent corporate governance analysis and proxy voting firm, is recommending that Lundin Mining (LUN-T, LUMI-O) shareholders vote in favour of its bid for the company.
“Based on a review of the terms of the transaction, in particular, reasonable strategic rationale, apparently manageable risks and absence of governance concerns, shareholder approval is warranted.” Equinox quoted ISS as saying in a statement.
A special meeting of Lundin shareholders is scheduled for Apr. 11.
In announcing the recommendation of ISS, Craig Williams, Equinox’s president and chief executive, reiterated his view that the deal makes sense.
“This transaction is strategically compelling and offers substantial benefits for Equinox shareholders, including geographic and project risk diversification, immediate cash flow and earnings accretion, and superior leverage to the near term copper price cycle derived from creating one of the highest quality, high growth copper portfolios.”
Under the offer, each Lundin shareholder is being offered $8.10 in cash or 1.2903 Equinox common shares and $0.01 in cash. If Equinox’s bid is successful, Lundin would become a wholly-owned subsidiary. If Equinox acquires all of Lundin’s common shares, it will pay a total of $2.4 billion in cash and issue about 379 million Equinox common shares to Lundin shareholders.
Equinox owns 100% of the Lumwana copper mine in Zambia, which it acquired in 1999, and is building the Jabal Sayid copper-gold project in Saudi Arabia, where first production is scheduled for 2012.
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