Equinox steps in with $1.25b Citadel bid
Barry FitzGerald
October 26, 2010
AUSTRALIA'S most successful self-made female mining executive, Ines Scotland, the managing director of Citadel, has struck an agreed deal to have Perth's Zambian copper producer Equinox take over the company for $1.25 billion.
Ms Scotland arranged a back-door listing for the miner through a sleepy medical equipment supplier in 2003 and took it off to Saudi Arabia, with Citadel the first Western group to secure a mining licence in the oil kingdom.
Citadel, of which Ms Scotland owns 4.5 per cent, is now on its way to becoming a copper producer in the country from the development of the Jabal Sayid project.
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A successful bid would establish a newly enlarged Equinox as the world's 13th biggest copper producer with annual production of 200,000 tonnes, rising to 260,000 tonnes within four years from Zambia and Saudi Arabia.
Late yesterday there was speculation that First Quantum of Canada, an African copper producer and owner of the former BHP Billiton-owned Ravensthorpe nickel project in Western Australia, was about to announce a takeover bid for Equinox.
Whether such a move would include Citadel was uncertain. But what the speculation did do was fuel a strong share price rise for Equinox, something unusual for a company that has just made a largely scrip takeover bid.
The recommended offer for Citadel from Equinox is 10.5? a Citadel share in cash and one Equinox share for every 14.3 Citadel shares. Equinox shares closed 18? or 3.1 per cent higher at $5.95 in response to the First Quantum talk, and Citadel rose 8? or 18.8 per cent to 50.5?.
The Equinox bid valued Citadel shares at the close at 52.1? a share.
Ms Scotland said the agreed bid from Equinox was ''both a happy and a sad day''.
''Citadel has been my baby for a long time. It's going, but it's not going away. It's just going in to a bigger company.'' She said that there had been positive feedback in that Citadel was combining with a bigger force that had development expertise and that would be able to accelerate Citadel's exploration pipeline in Saudi Arabia.
The fact that the takeover is a ''copper-for-copper'' deal had gone down well, Ms Scotland said.
''If you are bullish on copper, then to be able to have shares in an [enlarged] copper company going forward is great.''
Equinox starts the Citadel offer with a pre-bid acceptance agreement for 19.9 per cent of the company. That agreement covers all of the Citadel directors, the trading group Transamine, and Citadel's soon to be bought out joint venture partners in the Jabal Sayid project.
Early work by Citadel on securing joint venture partners for one or more of the 10 exploration projects outside of Jabal Sayid is to be put on hold while the Equinox takeover is being completed.
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