HudBay Minerals Inc. has extended its hostile bid for fellow Canadian miner Augusta Resource Corp. until early April and said it waived the minimum tender condition.
That would allow HudBay, which already owns a 16-per-cent stake in Augusta, to build its position in the smaller miner.
HudBay’s original offer required two-thirds of Augusta’s shareholders to accept the bid in order to succeed.
Waiving this condition will make it harder for Augusta to block the bid.
Augusta said management, directors and four shareholders holding more than a third of the miner’s outstanding stock have indicated they will not accept HudBay’s offer.
But if HudBay can convince other stockholders to tender their shares, the company could eventually control enough shares to make it difficult for Augusta to run its business.
HudBay, which has a zinc, copper and precious metal mine in Manitoba as well as projects in Peru and Canada, said any Augusta share that is tendered will be accepted for payment after its bid expires April 2.
The stock offer of 0.315 of a HudBay share for every Augusta share is valued at $2.58 based on current prices and is below Augusta’s trading price of $3.25.
The spread between HudBay’s offer and Augusta’s price has widened, suggesting that investors expect a higher bid to emerge.
HudBay wants Augusta for its large Rosemont copper project in Arizona.
The companies embarked on friendly talks in 2010 but negotiations ended because of a long-standing dispute over the timing of Rosemont’s development.
Augusta was not immediately available for comment.