Trucks are seen at a copper mine of Jiangxi Copper in Dexing, Jiangxi province, China on Dec. 16, 2015.CHINA STRINGER NETWORK/Reuters
First Quantum Minerals Ltd. fell as much as nearly four per cent on Monday after the copper miner said it had adopted a poison pill takeover defence, nearly a month after China’s Jiangxi Copper Co Ltd agreed to pay US$1.1-billion to become the miner’s largest shareholder.
The move adds a potential barrier to any takeover proposal at a time analysts, bankers and miners expect to see more deals in copper, a critical ingredient in low-carbon technologies.
The rights plan comes into force immediately, First Quantum said.
The shares were trading at $11.99 early in Monday’s session on the Toronto Stock Exchange, but later pared some losses to trade at $12.19.
State-backed Jiangxi Copper said in a regulatory filing last month that it would buy Cupric Holdings Ltd from Pangaea Investment Management Ltd. Cupric held around 18 per cent of First Quantum’s issued share capital as of Dec. 9.
First Quantum, last September, said it was in talks with Jiangxi for a potential sale of a minority interest in its Zambian copper assets, Kansanshi and Sentinel. Such a deal could generate about US$2-billion in proceeds, according to Scotiabank analysts.
However, Jiangxi is prevented from buying more than a 20 per cent interest in First Quantum under a standstill agreement reached by the companies in October.
First Quantum is also looking for strategic partners to develop new copper projects.
The company is eyeing a US$1-billion investment to lift production at Kansanshi, Reuters reported on Friday.
First Quantum said its rights plan is triggered in the event any person becomes a beneficial holder of 20 per cent or more of the outstanding shares. It said the plan is subject to ratification by shareholders within six months of its adoption.
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