Hudbay Minerals to make offer to acquire Augusta Resource Corporation HudBay Minerals announced that it intends to commence an offer to acquire all of the issued and outstanding common shares of Augusta Resource Corporation not already owned by Hudbay. Under the terms of the Offer, Augusta shareholders will be entitled to receive 0.315 of a Hudbay common share for each Augusta common share held, representing approximately C$2.96 per Augusta common share. The Offer represents a premium of 62% to Augusta's 20-day volume-weighted average price on the TSX for the period ending February 7, and a premium of 18% to Augusta's closing share price on the TSX on February 7 in addition to Augusta's 26% share price increase during the two trading days preceding the Offer. The Offer values Augusta at an enterprise value of approximately C$540M on a fully diluted in-the-money basis.
Hudbay Minerals downgraded at BofA/Merrill As previously reported, BofA/Merrill downgraded Hudbay Minerals to Neutral from Buy. The firm lowered Hudbay Minerals free cash flow estimates and price target to $9.60 from $12 following a reduction in copper and Brent oil price forecasts and said it does not expect a recovery until 2017.