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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (29450)	11/25/2008 9:39:50 AM
From: LoneClone	Read Replies (1) \| Respond to of 193616

Upstart's run at HudBay 'value-destroying concept' ANDREW WILLIS 00:00 EST Tuesday, November 25, 2008 globeinvestor.com While there's not a lot of love for HudBay Mineral's plan to buy Lundin Mining, an attempt to block the deal and bust up HudBay is getting even less respect from analysts. HudBay is bidding for debt-heavy Lundin to gain control of its copper mines. Analyst Onno Rutten at UBS Securities pointed out the downside to HudBay's all-stock offer yesterday, noting that the price is a "steep" 103-per-cent premium to the price of Lundin's stock, and means HudBay would also inherit marginal zinc mines and $470-million in Lundin debt. HudBay isn't giving shareholders an opportunity to vote on the Lundin purchase, so it is likely to close, and Mr. Rutten said "the conditional 'intention to make an offer' for HudBay by microcap merchant bank Jaguar Financial has a low probability of proceeding." Jaguar is run by veteran investment banker Vic Alboini, who runs Northern Securities. Mr. Alboini has been a player in small-capitalization mining financings for years, with Northern, Yorkton Securities and Loewen Ondaatje McCutcheon. RBC Dominion Securities mining analysts said yesterday that the Jaguar proposal "is a value-destroying concept and shareholders would be better off holding HudBay." UBS's Mr. Rutten added that the Plan of Arrangement for the Lundin takeover offers limited legal room for cancellation. "Jaguar did not address the likely legal challenges in breaking a Plan of Arrangement and we therefore assign little probability to the Jaguar offer." HudBay had the misfortune of striking a deal to create a domestic powerhouse in copper and zinc just as investment dealers were slashing their forecasts on the metals. GMP Securities stepped up as HudBay's adviser, while Haywood Securities was on the other side of the table for Lundin.