Dec 9 (Reuters) - Shares of Canada's First Quantum Minerals
Ltd rose as much as 5% to their highest since May on
Monday after China's Jiangxi Copper Co Ltd
agreed to buy a unit of the Canadian miner's largest shareholder
for $1.1 billion.
State-backed Jiangxi Copper said on Monday it would buy
Cupric Holdings Ltd from investment company Pangaea Investment
Management Ltd. Pangaea is First Quantum's biggest
shareholder, owning 17.6% stake, according to Refinitiv data.
The move adds to speculation about First Quantum amid
heightened expectations for deals in copper, seen as a critical
ingredient in low-carbon technologies. Analysts also cited a
Chinese media report on Saturday that said Rio Tinto had
joined the bidding for First Quantum.
Reuters could not independently verify the report.
Representatives with First Quantum and Rio were not immediately
available for comment.
First Quantum shares closed 4.2% higher at C$13.56 in
Toronto while the benchmark Canadian share index was down 0.3%.
First Quantum in September disclosed it was in talks with
Jiangxi for a potential sale of a minority interest in its
Zambian copper assets.
Jiangxi is prevented from buying more than a 20% interest in
First Quantum under a standstill agreement reached in October.
First Quantum is also seeking partners for new copper
projects, including a possible joint venture with Rio Tinto
, Chief Executive Philip Pascall said last
month.
Pangaea has said that Jiangxi Copper, one of China's largest
copper producers, is a substantial non-controlling shareholder.
Pangaea said in October it had amassed a 10.8% position in
First Quantum and could increase the stake to 16.6%.
"Clearly there's an M&A angle to this, but I wouldn't
attribute it entirely to that," Jefferies LLC analyst
Christopher LaFemina told Reuters.
"I’m not sure what (Jiangxi) their bigger picture plan is,
but I don’t think you need to buy equity in the company to
negotiate a minority buyout for one of the assets," he added.
First Quantum could also be split up, with Jiangxi taking
its Africa assets and its Cobre Panama copper mine going to Rio,
Bank of Nova Scotia analysts said in a research note Monday.
(Additonal reporting by Clara Denina in London
Reporting by Jeff Lewis in Toronto; Editing by Richard Chang)
Rio Tinto (RIO)
