Here come the Chinese and their piggy banks --
Peru Copper announces friendly C$6.60 per share cash offer by Aluminum Corporation of China and concurrent C$70 million private placement
VANCOUVER, June 11 /CNW/ - Peru Copper Inc. (TSX:PCR/AMEX:CUP/BVL:CUP)
("Peru Copper" or the "Company") announced today that it has entered into a
definitive agreement (the "Support Agreement") pursuant to which Aluminum
Corporation of China ("Chinalco"), a diversified metals and mining company
based in Beijing, China, has agreed, subject to the terms of the Support
Agreement, to make an offer to acquire all the outstanding Peru Copper shares
by way of a friendly take-over bid (the "Offer") for C$6.60 per share in cash,
valuing the Company at approximately C$840 million. The Offer represents a
premium of 21% to Peru Copper's 20-day volume weighted average trading price
of $5.45 on the Toronto Stock Exchange (the "TSX") ending on May 23, 2007, the
last trading prior to the date on which the Company announced it had entered
into an exclusivity agreement. The acquisition of the Peru Copper shares will
be financed through Chinalco's cash on hand.
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Highlights:
- Cash Offer for all shares at C$6.60 per share
- Premium of 21% to 20-day volume weighted average price ending
May 23, 2007
- C$840 million aggregate purchase price for the outstanding shares
- Unanimous recommendation of the Peru Copper Board of Directors
- Lock-ups representing approximately 34% of the outstanding Peru
Copper shares
- $21 million non-completion fee and right to match
- Concurrent C$70 million private placement of approximately
13.2 million Peru Copper shares to Chinalco
>>
In order to ensure that Peru Copper has adequate funds to advance the
Toromocho Project in the near term, Chinalco has also agreed to invest
C$70 million by subscribing for 13.2 million Peru Copper shares at a price of
C$5.30 per share, representing an issue discount of 2.75% to Peru Copper's
20-day volume weighted average trading price of C$5.45 on the TSX ending on
May 23, 2007. Following completion of the private placement, Chinalco will own
approximately 9.9% of the then outstanding Peru Copper shares. Chinalco's
subscription is not conditional on the successful completion of the Offer. The
private placement is subject to the approval of the TSX and the American Stock
Exchange and is expected to close within the next two weeks.
The Support Agreement provides for, among other things, customary board
support and non-solicitation covenants (subject to customary "fiduciary out"
provisions that entitle Peru Copper to consider and accept a superior
proposal), a five business day right to match in favour of Chinalco and the
payment to Chinalco of a non-completion fee of C$21 million if the acquisition
is not completed in certain specified circumstances.
In connection with the Offer, all of the directors and certain other
shareholders representing approximately 34% of the outstanding Peru Copper
shares (calculated on a fully-diluted basis) have entered into lock-up
agreements with Chinalco pursuant to which they have agreed to, among other
things, tender all their Peru Copper shares to the Offer.
The Peru Copper Board of Directors, after receiving the recommendation of
its special committee and consulting with its financial and legal advisors,
has unanimously determined that the Offer is fair and in the best interest of
the Peru Copper shareholders and to recommend acceptance of the Offer. UBS
Investment Bank, the financial advisor to the Peru Copper Board of Directors,
has provided an opinion that the Offer is fair, from a financial point of
view, to the Peru Copper shareholders. Canaccord Capital Corporation, acting
as financial advisor to the Special Committee of the Peru Copper Board of
Directors, has also provided an opinion that the Offer is fair, from a
financial point of view, to the Peru Copper shareholders.
J. David Lowell, Chairman of Peru Copper, commented, "Since November
2005, Peru Copper has been conducting a strategic review of the options
available to the Company to maximize the value of the Toromocho Project.
Having assessed all options available to the Company, we have concluded that
Chinalco's offer is the best option available to our shareholders and to the
Company. We are delighted that a company of the financial and technical
strength of Chinalco is going to take the Toromocho Project to the next stage
of its development."
Mr. Yaqing Xiao, President of Chinalco, said, "The founders, management
and employees of Peru Copper have done an exceptional job of identifying the
resource potential of the Toromocho Project and of advancing the project
towards the definitive feasibility stage. We are extremely excited by the
prospect of working with the existing employees of Peru Copper, and the
government and people of Peru to realize the full potential of this
world-class mining project." Mr. Yaqing Xiao went on to say, "This is an
important step in our strategic growth outside China and will provide us with
an opportunity to leverage the strength of our balance sheet and our extensive
project development expertise to advance the Toromocho Project. We look
forward to identifying further investment opportunities in Peru and around the
world."
Formal documentation relating to the take-over bid is expected to be
mailed by Chinalco in mid to late June 2007. The Offer will be open for
acceptance for a period of not less than 35 days and will be conditional upon,
among other things, valid acceptances of the Offer by Peru Copper shareholders
owning not less than 66 2/3% of the outstanding Peru Copper shares (calculated
on a fully-diluted basis). In addition, the Offer will be subject to certain
customary conditions, relevant regulatory approvals and the absence of any
material adverse change with respect to Peru Copper. Chinalco may waive the
conditions of the Offer in certain circumstances. The obligation of Chinalco
to take up and pay for shares pursuant to the Offer is also subject to the
receipt of certain Chinese Government approvals. If its offer is successful,
Chinalco has agreed to take steps available to it under relevant securities
laws to acquire any remaining outstanding Peru Copper shares.
UBS Investment Bank is acting as financial advisor to Peru Copper and
Cassels, Brock & Blackwell LLP is acting as legal counsel to Peru Copper.
BMO Capital Markets is acting as financial advisor to Chinalco and
McCarthy Tetrault LLP is acting as legal counsel to Chinalco.
North American Investment Market Call
A conference call with senior management of Peru Copper for the North
American investment community has been scheduled for Monday, June 11, 2007 at
10:00am Vancouver time/1:00pm Toronto time. Members of the investment
community may participate by dialing 1-800-733-7571 within North America and
1-416-644-3414 outside of North America.
The call will be available for replay until Monday, June 25, 2007 by
calling 1-416-640-1917 or 1-877-289-8525 and entering the pass code 21236239
followed by the number sign.
About Peru Copper Inc.
Peru Copper is involved in the acquisition and exploration of potentially
mineable deposits of copper in Peru. On June 11, 2003, Peru Copper entered
into the Toromocho Option Agreement ("Toromocho Option") with Empresa Minera
del Centro del Peru S.A. ("Centromin"), a Peruvian state-owned mining company,
whereby Centromin granted the Company the option to acquire its interest in
the mining concessions and related assets of the Toromocho Project.
About Aluminum Corporation of China
Chinalco is the largest diversified metals and mining company in China.
Chinalco is focused on the Chinese and international aluminum markets but also
engages in resource exploration and down stream operations in the fields of
aluminum, copper, rare metals and other non-ferrous metals. Chinaclo's largest
asset is a 40.46% stake in Chalco, the largest producer of primary aluminum in
China. Chalco is the second largest refiner of alumina and among the largest
producers of primary aluminum in the world. Chalco produced 3.0 million tons
of aluminum and 9.2 million tons of alumina in 2006. Chalco's shares trade on
stock exchanges in New York, Hong Kong and Shanghai. The market value of
Chalco's shares is approximately US$32 billion, making it one of China's
largest publicly traded companies. |
