On Monday, Lundin (TSX: LUN) unveiled plans to make a new cash offer of C$1.4 billion (US$1.06 billion) for Nevsun, following an earlier $1.5 billion (US$1.1 billion) offer in partnership with Euro Sun Mining.
"This latest announcement from Lundin continues to ignore the fundamental value of Nevsun and its assets," Nevsun president and CEO Peter Kukielski said, urging shareholders to take no action.
He said Nevsun had not received any further information about the proposed offer of $4.75 per share and noted it was 5% lower than Lundin's last expression of interest on July 3, of $5 per share funded in cash and Lundin shares.
Nevsun shares shot up more than 13% yesterday to close 1c higher than the Lundin proposal at $4.76.
Since Lundin first expressed interest in Nevsun, Kukielski said the company had released a prefeasibility study on the Timok Upper Zone copper-gold project in Serbia, released an inferred resource for the Timok Lower Zone - its joint venture with Freeport-McMoRan - and extended the minelife at its majority-owned Bisha mine in Eritrea.
"Despite the progress we have made in enhancing Nevsun's value, Lundin's notional takeover offer represents only a 13% premium to Nevsun's closing trading price of $4.21 per share on the TSX on July 16 and only a 9.1% premium to the volume weighted average trading price of Nevsun's shares over the 30 days ended July 16, 2018," he said.
Nevsun said it would consider a formal offer if it was received and said it was open to any transaction that was in the best interest of the company.
Lundin shares closed 4c higher to $7.52.
