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Equinox shares soar 29% in Australia Add to ...

Equinox Minerals Ltd.'s share price jumped nearly 29 per cent overnight on the Australian Stock Exchange after China's Minmetals Resources Ltd. said it intends to launch a $6.3-billion (Canadian) hostile bid for the Toronto-based miner.

Shares closed in Australian at A$1.64 to A$7.35 after a late Sunday announcement that the Hong Kong unit of China's largest metals trader wanted Equinox.

Equinox is currently involved in its own hostile takeover battle for fellow Canadian miner Lundin Mining .

Minmetals said it will offer $7 per share, which represents a 23 per cent premium to the closing price of Equinox shares on the Toronto Stock Exchange on Friday.

Minmetals' CEO Andrew Michelmore urged Equinox shareholders to reject the Zambia-focused copper miner's bid for Lundin.

The bid caused Lundin's planned merger with Inmet Mining to fall apart last month.

"In order to take advantage of MMR's forthcoming offer, Equinox shareholders should reject the Lundin acquisition at the shareholders' meeting on April 11 and tender their shares into MMR's offer," Mr. Michelmore said Sunday in a news release.

Minmetal said the proposed acquisition fits with its strategy to focus on upstream base metals businesses, substantially increases its copper exposure, and expands its production profile.

It also marks Minmetals' first investment in the African copper belt and the Middle East and the company said investment in both regions is consistent with its long-term strategic growth plans.

Minmetals said the offer will be financed through a combination of existing cash reserves, long-term credit facilities from Chinese banks and equity including financial investments in the company by Chinese institutions.

It also said that the offer has the support of its largest shareholder, China Minmetals Corp.

"We regard this transaction as an important next step in Minmetals Resources' transformation into a leading upstream base metals company," said Zhou Zhongshu, the president of China Minmetals Corp.

Minmetal said it expects to formally make the offer to Equinox shareholders within three weeks.

Equinox confirmed late Sunday that it was aware of the Minmetal announcement.

"The board of directors of Equinox will be meeting to consider this unsolicited proposal, and will comment further following careful consideration of the terms and implied value for Equinox," the company said in a news release.

Equinox has offered $8.10 per Lundin share in cash or 1.2903 Equinox shares plus a penny for each share. The amount of cash is limited to $2.4 billion, while the number of shares offered is capped at 380 million. Under the Equinox deal, current Lundin shareholders would have owned about 30 per cent of the new Equinox.

The Equinox offer has been repeatedly criticized for the amount of money the company will have to borrow to make its offer.

Equinox's main asset is the Lumwana copper mine in Zambia, one of the largest new copper mines to be developed globally over the last few years.

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