Execution Helping Hudbay Minerals Get Its Due
Stephen Simpson, CFA
Stephen Simpson, CFA
No White Knight For Augusta Resources, Hudbay Takes Rosemont Project
Itinerant • 11 Comments
Itinerant • 11 Comments
Jun. 23, 2014, 8:36 AM
- Augusta Resources (AZC) +5.7% premarket after accepting a revised takeover offer from HudBay Minerals (HBM).
- The revised offer is worth ~C$555M, or $3.56/share; HBM is offering 0.315 of its shares for each AZC share, the same as its initial hostile bid, but it is now adding 0.17 of a warrant for each AZC share to facilitate a friendly deal.
- The deal gives HBM the Rosemont project in Arizona, one of the world’s most promising undeveloped copper deposits, with 7B lbs. of copper reserves and resources.
May 23, 2014, 3:19 PM
- The rare sighting of an ocelot will delay the permitting process for Augusta Resource's (AZC +1%) Rosemont copper project, and some analysts think the uncertainty could raise the probability of success for HudBay Minerals' (HBM -1.4%) hostile takeover bid.
- Desjardins analyst Jackie Przybylowski says the news could encourage AZC shareholders to tender to HBM’s bid, noting that HBM had said permitting for Rosemont would take much longer than AZC was planning.
- Laurentian Bank's Christopher Chang thinks Rosemont will get permitted, but AZC shareholders will get increasingly impatient if there are more delays.
- CIBC's Tom Meyer puts less weight in the news, saying further permitting delays are not surprising and are factored into the current share price.
May 16, 2014, 5:45 PM
- HudBay Minerals (HBM) says it is extending its offer to acquire all outstanding shares of Augusta Resource (AZC) to May 27; the hostile offer had been set to expire today.
- HBM, which owns a ~16% stake in AZC, has offered 0.315 of a HBM share for each AZC share, currently valuing the company at ~$458M, or $3.15/share.
Mar. 28, 2014, 11:25 AM
- Augusta Resource (AZC +3.2%) says nine parties, including "significant industry players," had expressed interest in the company in response to its strategic review process, as it tries to find a white knight bidder to fight off HudBay Minerals' (HBM +1.8%) hostile takeover bid.
- AZC says it will hold site visits to its Rosemont copper project, which is near construction, over the next few weeks.
- AZC also says it will hold a shareholder meeting May 9 to keep the poison pill put in place last year when HBM started building its stake in AZC.
Mar. 14, 2014, 4:59 PM
- HudBay Minerals (HBM) extends its hostile takeover bid for Augusta Resources (AZC) and drops its condition that shareholders holding at least two-thirds of the stock tender to the offer.
- AZC shareholders now have until 5 pm on April 2 to receive 0.315 of a HBM share for each of their shares.
- HBM says the bid, which AZC has rejected as inadequate, represents a 62% premium to the 20-day volume weighted average prices of the two issues prior to the offer.
Feb. 28, 2014, 11:59 AM
- HudBay Minerals (HBM +3.4%) CEO David Garofalo tears into the management at takeover target Augusta Resources (AZC +1.6%), calling the company "essentially insolvent" and warning that its shareholders were at risk without a quick wrap-up in permitting for its Rosemont copper project.
- AZC said this week that it expects to receive its final required permit for Rosemont in H1 of this year, while HBM contends the permitting process will take much longer and could cause serious liquidity problems, noting that a $109M loan comes due in July.
- AZC "really [has] no money, they have significant debt, and that debt is coming due very soon," Garofalo says, adding that two permits AZC has obtained are facing legal challenges, which could delay planned funding from Silver Wheaton (SLW).
Feb. 12, 2014, 9:59 AM
- Traders are lining up bets that Augusta Resource (AZC +2.3%) will win a higher offer than HudBay's (HBM +3.2%) recent unsolicited bid of C$2.96/share - ~C$540M including net debt -
- AZC’s Rosemont copper project in Arizona is large enough to attract other producers including OZ Minerals (OZMLF) and Teck Resources (TCK), Laurentian Bank of Canada says, estimates the company’s value is at least C$3.89/share based on similar deals.
- Freeport McMoRan (FCX) is another possible suitor with the financial strength to outbid HBM, according to National Bank Financial.
- “HudBay’s offer has little chance of success at its current valuation,” says a Toronto Dominion analyst.
Feb. 10, 2014, 7:57 AM
- HudBay Minerals (HBM) launches a $540M hostile takeover bid for Augusta Resources (AZC), seeking to gain access to AZC's Rosemont copper deposit in Arizona.
- HBM is offering to buy shares of AZC it does not already own for C$2.96/share in stock, an 18% premium over AZC’s Friday closing price in Toronto after shares jumped 25% on Thursday and Friday.
- HBM says AZC has “few financing options” remaining for Rosemont and would be in a much stronger position to develop the $1.2B project.
- Rosemont is expected to produce 243M lbs./year of copper, which could be as much as 10% of U.S. copper output.
HudBay Minerals, Inc. operates as an integrated mining company with the operations, development properties and exploration activities across the America. It provides metals mining, metallurgical processing and refining, which produces zinc, copper, gold, silver and zinc oxide. The company... More
Sector: Basic Materials
Industry: Industrial Metals & Minerals
Country: United States
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