Nevsun shares soar as it rejects $1.2-billion bid from Lundin, Euro Sun

Shares in base metals producer Nevsun Resources (TSX, NYSEMKT:NSU) skyrocketed on Tuesday after the company’s board unanimously rejected a Cdn$1.5-billion (about $1.2bn) unsolicited bid from fellow Canadian miners Lundin Mining and Euro Sun Mining.

The suitors had disclosed late on Monday the offer made earlier to Vancouver-based Nevsun, noting their disappointment for not having been able to reach a deal.

“After months of attempting to reach an agreement, we are disappointed that Nevsun has prevented its shareholders from considering our premium proposals,” the companies said, adding that they would continue trying to ink a deal with Nevsun.

“At this point in time, we believe that all Nevsun shareholders should be made aware of this opportunity,” they said.

Their $5 a share proposal, which consists a mix of cash and shares in both Lundin and Euro Sun, represents a 31% premium compared to Nevsun’s closing price on the Toronto Stock Exchange on Monday, they said.

Lundin said it first approached Nevsun on February 7, submitting a new proposal on February 25, both of which were rejected. On April 3, Lundin presented Nevsun with an offer to acquire its European assets for cash and shares, which was also rejected.

Nevsun has two main assets — the Bisha copper-zinc mine in Eritrea and a copper-gold project in Serbia called Timok. Under the proposal, Euro Sun would gain control of the Eritrean mine, while Lundin would own and fund the development of Timok.

In 2016, Lundin tried and failed to buy Timok from previous owner Freeport McMoRan.

Shares in Nevsun were up more than 18% to Cdn$4.51 by 9:54 a.m. Toronto time.

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