Barrick Gold Corp (ABX), the world’s largest gold miner, has agreed to buy Australian-based copper producer Equinox Minerals for about 7.3 billion Canadian dollars, or $7.68 billion, topping a C$7-a-share bid from China’s Minmetals Resources in a big bet on spiking copper demand. The all-cash offer values Toronto and Sydney listed Equinox at 8.15 Canadian dollars a share, an 8.7% premium over its Thursday closing price. The purchase price is also 16 percent higher than Minmetals Resources Ltd. offered earlier this month.
“The acquisition of Equinox would add a high-quality, long-life asset to our portfolio, and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions,” Aaron Regent, chief executive of Barrick Gold, said in a statement.
Regent said the transaction was anticipated to immediately boost the Toronto-based company’s net income and revenue on a per-share basis.
“It does not dilute our shareholders’ gold exposure per share, and it enhances copper exposure and leverage per share in a strong copper price environment,” he added.
The Equinox board has unanimously approved the Barrick Gold deal.
Morgan Stanley (MS) and RBC Capital Markets advised Barrick on the deal, while CIBC World Markets, Goldman Sachs (GS) and TD Securities acted as financial consultants to Equinox.