Canadian miner Nevsun calls Lundin's new offer undervalued (updated)

Euro Sun Mining

17/07/2018 15:39

(Adds analyst comment, details on deal, share movement)
    July 17 (Reuters) - Nevsun Resources Ltd  NSU.TO  said on
Tuesday rival Lundin Mining Corp's  LUN.To  latest buyout
proposal undervalues the base metals miner and its assets.
    Nevsun's shares soared 14.2 percent on the Toronto Stock
Exchange to C$4.80, above Lundin's per share offer of C$4.75. 
    "This latest announcement from Lundin continues to ignore
the fundamental value of Nevsun and its assets," Nevsun's Chief
Executive Officer Peter Kukielski said in a statement. 
    Nevsun said it had not yet received a formal offer but would
engage with Lundin.  urn:newsml:reuters.com:*:nPn2gXNGDa 
    Cash-rich Lundin, which has been eyeing Nevsun's large
high-grade Timok copper project in Serbia and its Bisha copper
and zinc mine in Eritrea, said on Monday it planned to buy
Nevsun for about C$1.4 billion ($1.07 billion).  urn:newsml:reuters.com:*:nL4N1UC56H
    Lundin's new all-cash bid is about C$100 million lower than
the cash-and-stock offer made in May, in partnership with Euro
Sun Mining Inc  ESM.TO . 
    "(Monday's) all-cash offer by Lundin actually represents a
premium to the previous bid," Shane Nagle, an analyst with
National Bank Financial said. 
    Given the pullback in Lundin and Euro Sun shares, that offer
would be valued at less than C$4.60 per share, he said, adding
that the current offer seemed fair.
    Nagle also said "no one from the Canadian mid-tier space is
likely going to compete with Lundin's offer", but highlighted
that Timok is a fairly high quality development opportunity and
may draw some attention from large-scale global diversified
companies like Rio Tinto  RIO.L   RIO.AX .
    Lundin said it might pull the offer if Nevsun implemented or
attempted to implement any defensive tactics.
    Through Monday's close, Nevsun's shares had gained 10.7
percent since May 6, when Lundin made its first offer.

 (Reporting by Karan Nagarkatti in Bengaluru; Editing by Sriraj
Kalluvila)
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