The Ontario Securities Commissionordered on Friday that HudBay Minerals hold a shareholders meeting before itproceeds with its planned C$550 million (US$440 million) takeover of fellowCanadian base metals producer Lundin Mining.
The controversial deal waschallenged by dissident HudBay shareholder Jaguar Financial, which along with asmall but powerful group of HudBay shareholders has criticised the all-stockdeal because of its dilutive effect on HudBay shares.
Following the ruling by the OSC,Canada's major securities regulator,HudBay said it is reviewing the decision with its lawyers.
Meanwhile, its shares leaped 21%to C$4.27 in early trading on the Toronto Stock Exchange, regaining some of theground lost since the takeover was announced in November.
Jaguar opposed the deal since itwas initially unveiled, and even launched a takeover offer for HudBay as a ployto break up the deal. Following the OSC announcement, it said it will notproceed with the offer.
HudBay said in late Novemberwould offer 0.3919 of a share for each Lundin share, which at Thursday's pricesvalued Lundin's stock at C$1.38 a share. Lundin shares closed on the TorontoStock Exchange on Thursday at C$1.19.
Jaguar and other shareholdersopposed the Toronto Stock Exchange's decision to conditionally approve the dealwithout getting the approval of HudBay shareholders.
Unlike other major exchanges, TSXrules allow for a company to issue more than 25% of its stock to buy a publiclytraded company without shareholder approval. As part of the Lundin takeover,HudBay will double the number of shares outstanding.
A separate, but parallel, OntarioSuperior Court challenge on the deal is scheduled to begin on Monday.
