The world’s ongoing demand for raw materials evidenced via another big deal

Yesterday saw the announcement of a counter bid for Australian-Canadian copper miner Equinox Minerals by Barrick Gold. The offer values Equinox at over $7.6bn and follows on from the unsolicited approach for Equinox by China’s Minmetals Resources that happened at the beginning of this month.

Deals involving raw materials companies during 2010 reached the record levels seen back in 2007, totaling just over $320bn of deals. So far in 2011, with only one full quarter of the year gone and not even through April yet, deal values involving raw materials target companies stand at over $100bn, with Asian acquirors becoming more aggressive in their pursuit of targets over the last three years.

Minmetals has so far made no comment about the counter offer, however Barrick’s chairman was quoted in the Financial Times as saying that Minmetals “has a much better chance to expand their access to minerals by co-operating with companies like us” and that “having an auction is not in the interests of anybody” – I guess that statement is easier to make when your offer has been recommended to the shareholders by the Equinox board and you have a termination fee of CAD$250m in place should Equinox accept a higher offer from another party.

Over to you Minmetals – it’s your move.
 

Filed under: resources, takeover, mining