Nevsun Resources Ltd. said Sept. 5 that its board unanimously recommended Zijin Mining Group Co. Ltd.,'s C$6.00-per-share all-cash takeover bid of the Canadian miner, valued at C$1.86 billion.
Zijin's takeover offer represents a 57% premium from Nevsun's unaffected closing price of C$3.82 per share on May 7, the date of Lundin Mining Corp.'s first publicly announced intention to acquire the miner, with the Zijin offer also representing a 26% premium over the C$4.75-per-share hostile takeover bid launched by Lundin on July 26.
Nevsun rejected the Lundin acquisition bid as it failed to "recognize the fundamental and strategic value" of its assets, including the Timok copper project in Serbia and the Bisha zinc mine in Eritrea.
The Zijin offer is subject to a minimum acceptance of over 66% of Nevsun's issued share capital. Zijin currently holds 3,197,191 shares, representing about 1.06% of Nevsun's total issued and outstanding shares.
Should the deal fall through, a US$50 million termination payment will be payable by Zijin in certain circumstances, including the failure to obtain the necessary approvals from Chinese authorities. Nevsun will pay the sum to Zijin if it signs a superior proposal or if the board withdraws or amends its recommendation for the deal.