Lundin and Inmet terminate deal

By Pav Jordan and Julie Gordon

TORONTO (Reuters) – Lundin Mining Corp (LUN.TO: Quote, Profile, Research) and Inmet Mining (IMN.TO: Quote, Profile, Research) said on Tuesday they had agreed to walk away from a deal that would have created a C$9 billion copper producer, and Lundin said it was exploring other options.

The tie-up would have created a Canadian copper miner called Symterra with annual copper production of some 500,000 tones of copper per year by 2017.

“We have however agreed to mutually terminate the agreement on the grounds that we could not reach a position that we thought would be supported by both companies’ shareholders,” the companies said in a joint statement.

Lundin also said it was exploring other sale options and urged shareholders to reject a rival takeover bid from Australia’s Equinox Minerals (EQN.TO: Quote, Profile, Research), which values Lundin at C$4.46 billion.

“Our exploration of alternatives starts immediately and we will be actively and aggressively looking for the best value transaction,” said Lundin President and Chief Executive Phil Wright.

Lundin also said it adopted a so-called “poison pill” defense as it searches for alternatives and fends off buyers looking for bargain basement prices.

“Having agreed to terminate with Inmet, we can now pursue new alternatives to significantly improve shareholder value and get a proper premium if we do a change of control transaction,” said Lukas Lundin, chairman of Lundin Mining.

The Equinox offer is worth about C$7.59 per share, in line with where Lundin’s shares closed on Tuesday.

(Reporting by Julie Gordon and Pav Jordan, writing by Alastair Sharp; Editing by Ted Kerr and Carol Bishopric)

Lundin and Inmet terminate deal