Tongling acquires Corriente Resources

Finance

Publishing Date: 30 Dec 2009 2:18pm GMT
Author: Mining Journal

China's second largest copper producer, Tongling Nonferrous Metals Group Holdings Co, has joined with China Railway Construction Corp (CRCC) to make an agreed bid for Canada's Corriente Resources Inc.

The partners have offered Yu4.41 billion (US$646 million), through joint-venture vehicle CRCC-Tongguan Investment Co, for the Vancouver-based company. Corriente's main asset is the wholly-owned Panantza-San Carlos copper project in southern Ecuador.

State-controlled Tongling and CRCC are paying C$8.60/share in cash, which represents a 27% premium to Corriente's average trading price for the 30 trading days before Christmas.

Full details of the offer will be included in a formal circular that is expected to be mailed to shareholders by February 1. Corriente described the transaction as "the culmination of a comprehensive review of strategic alternatives to maximise shareholder value".

All officers and directors of Corriente, who collectively hold 12% of the company's shares, have entered into lock-up agreements, under which they have agreed to tender their shares to the offer. In the event that the transaction is not completed, under certain circumstances, Corriente has agreed to pay a termination fee of C$20 million.