Inmet Mining shares up on merger bid

Shares in base metals producer Inmet Mining gained more than six per cent Thursday, a day after it signed a $49-billion merger deal with Lundin Mining.

Inmet shares closed up $4.63 to $79.39 on the Toronto Stock Exchange. Lundin's ended down 15 cents, or 1.9 per cent, at $7.75.

The new company will be called Symterra Corp. and have five mines in Europe as well as two large copper development projects in Panama and Congo.

The deal came just one day after another big mining takeover move, as Cleveland-based Cliffs Natural Resources announced a $4.9-billion bid for iron ore mining firm Consolidated Thompson Iron Mines of Montreal.

It requires approval by two-thirds of the shareholders of both companies.

Under the deal, Inmet stockholders receive 3.4918 shares of Symterra for each Inmet share, while Lundin shareholders will receive 0.3333 of a Symterra share for each Lundin share held. Each company is based in Toronto.

It still requires approval by two thirds of the shareholders of each company. Votes are expected to be held in March.

"Symterra provides one of the best growth profiles for copper amongst major mining companies, combined with attractive exposure to zinc and other metals," Lundin chairman Lukas Lundin said in a statement Wednesday.

Inmet shareholders are expected to hold 53 per cent of the stock in the new company, with Lundin shareholders holding the remainder.

Deal has largest shareholders' support

The largest shareholders and directors of each company have agreed to support the deal, and each company has agreed to pay the other a $120-million break fee in certain circumstances and granted the other a right to match any competing offer.

Inmet has interests in four mines, including the Cayeli mine in Turkey, Las Cruces in Spain, Pyhasalmi in Finland and Ok Tedi in Papua New Guinea as well as the Cobre Panama project in Panama.

Lundin has operations in Portugal, Spain and Sweden, producing copper, nickel, lead and zinc as well as an equity stake in the Tenke Fungurume copper-cobalt project in Congo.