will eqn being taken out instead

Things have gotten a little awkward in Hollywood, Florida.

That?s where the mining industry?s biggest players have gathered this week for the 20th BMO Capital Markets Global Metals & Mining Conference ? including Equinox Minerals Ltd., Lundin Mining Corp. and Inmet Mining Corp. ? who have found themselves in a love triangle of sorts.

In fact, Inmet and Lundin, which agreed to a $9-billion merger to form a new company named Symterra Corp. in January, are scheduled for a joint presentation at 3:30 p.m. ET Monday.

But now that Equinox has unveiled a hostile bid for Lundin, it not only derails Lundin?s merger with Inmet, but could also put Equinox in play.


Equinox?s $4.8-billion, or $8.10 per share (50% cash, 50% equity) offer is superior to Inmet?s offer to combine on a merger-of-equals basis, according to UBS analyst Onno Rutten.

?We view Lundin?s soft lock-ups and $120-million break fee as surmountable for an interloper,? he told clients. ?Moreover, we believe Lundin?s assets are relatively attractive from a strategic perspective??

Equinox?s higher valuation multiples and larger market cap relative to Inmet?s, provide it with a bidding advantage, Mr. Rutten said. He thinks Inmet?s ability to exercise its right to match Equinox?s offer could be hampered by its inability to offer a meaningfully higher equity ratio, in order to prevent a reverse takeover. It appears unable to offer meaningful cash without jeopardizing the start of construction start at its Cobre Panama project.

?The last-minute offer comes as a surprise, as the Lundin board has been evaluating strategic opportunities prior to merger negotiations with Inmet,? he told clients, adding that Equinox?s bid should succeed at this price.

?The Lundin offer is consistent with our understanding of Equinox management?s ambition to grow through M&A, while remaining receptive to a takeover offer for the company,? the analyst said, ?Given the magnitude of the transaction, we therefore believe that the offer for Lundin could result in Equinox itself becoming ?in play?.?

.Posted in: Mining, Trading Desk Tags: BMO Capital Markets Global Metals & Mining Conference, Equinox Minerals, Inmet Mining, Lundin Mining, M&A, metals, Mining, Takeovers .