Minmetals Resources chief executive officer Andrew Michelmore attends a news conference in Hong Kong April 4, 2011.BOBBY YIP
Minmetals Resources Ltd. said Wednesday that an Australian regulator has signed off on the company's $6.3-billion takeover bid for Equinox Minerals Ltd. .
Minmetals, a Chinese-owned company, said the Foreign Investment Review Board of Australia has no objection to the company's unsolicited offer for Equinox, which operates the Lumwana Mine in Zambia and is constructing the Jabal Sayid Project in Saudi Arabia.
Equinox is listed on the Toronto and Australian stock exchange and has corporate offices in both countries.
The $7-per-share offer by Minmetals for Equinox is expected to require approval under the Investment Canada Act, which requires foreign takeovers be of net benefit to Canada.
The deal is also conditional on Equinox dropping its hostile takeover bid for Lundin Mining Corp. .
However at least some investors expect a higher offer for Equinox may be possible as shares in the company traded down 5 cents at $7.51 on the Toronto Stock Exchange.
Minmetals has said its offer will be financed through a combination of cash reserves, loans from Chinese banks and equity financing including investments in the company by Chinese institutions.
It also said that the offer has the support of its largest shareholder, China Minmetals Corp.
The company said it expects to formally make the offer to Equinox shareholders within three weeks.