Shares of Hong Kong-traded Minmetals Resources Ltd. fell more than 9% after the Chinese company announced on Tuesday that it was dropping its nearly $6.3 billion bid for Australian-Canadian copper mining company Equinox Minerals Ltd.
The move followed a Monday announcement from Toronto, Canada-based Barrick Gold Corporation
Minmetals Resources said that it would not be able to compete with the bid from Barrick Gold Corporation because to do so would be value destructive.
Barrick Gold said that its offer had no financing condition because the company already has enough cash and committed financing in place to fund the acquisition.
Commenting on the deal in yesterday's announcement, Barrick Gold President and CEO Aaron Regent said, "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. Combined with our Zaldivar mine and Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world."
Equinox President and CEO Craig Williams said, "We are very pleased to support this offer. The offer allows our shareholders to realize immediate value and also positions our operations and employees as part of a world-class mining company."
The takeover attempt by Minmetals Resources was the latest example of China's attempts to secure resources to fuel the country's commodity-hungry economic growth.
Although Minmetals Resources Ltd. decided against entering into a bidding war for Equinox Minerals, the steep drop in the Chinese company's share price following the announcement shows that the company is still under pressure to pursue another deal.
Equinox Minerals has also said that a number of parties showed interest in the company after Minmetals Resources' initial offer.
If Minmetals Resources and other companies are still interest in acquiring copper assets, then there are a number of investment options to consider.
If copper assets are still in play, then the Global X Copper Miners ETF