First Quantum Says Adastra Investors Should Back Bid
2006-02-24 06:51 (New York)
By Simon Casey
Feb. 24 (Bloomberg) -- First Quantum Minerals Ltd. said
shareholders in Canadian miner Adastra Minerals Inc. should accept
a $189 million ($164 million) unsolicited takeover offer because
of its experience in building mines.
First Quantum has generated better returns for investors than
Adastra, the Vancouver-based company said today in a Regulatory
News Service statement. Adastra wants to process mining waste at
Kolwezi in the Democratic Republic of Congo, making it the world's
largest source of cobalt, a metal used in batteries and jet
engines.
``This experience should significantly reduce the execution
risk of Adastra's Kolwezi,'' Philip Pascall, First Quantum's chief
executive officer, said in the statement.
First Quantum wants to add Kolwezi to a portfolio of mines it
has built in Congo, neighboring Zambia and Mauritania. Adastra
said Feb. 17 shareholders controlling more than 50 percent of the
company indicated they won't support First Quantum's offer.
Tim Read, Adastra's London-based chief executive officer,
didn't return a telephone call seeking comment.
``First Quantum has the technical and operating skills and
the financial firepower to fast-track the Kolwezi development,''
John Meyer, an analyst in London at Numis Securities, said today
in an e-mailed note.
Negotiations Rejected
Adastra's interest in Kolwezi has dropped from 83 percent to
65 percent in the past two years, and will fall to 50 percent when
it proceeds with an agreed sale of a stake to Mitsubishi Corp. The
dilution of Adastra's stake in Kolwezi left the company's
shareholders without ``any cash benefit or meaningful share price
appreciation,'' First Quantum said.
Adastra rejected an offer to negotiate with First Quantum on
``multiple occasions,'' First Quantum added.
Shares of Adastra were unchanged in London at 125.5 pence as
of 11:18 a.m. local time. They have increased 43 percent since
First Quantum announced its offer on Jan. 18.
First Quantum's shares dropped 5 pence, or 0.3 percent, to
1,887.5 pence in London.
--Editors: Wallace (jdg). |
