No savior for Westmin

Having failed to find a white knight, Westmin Resources (WMI-T) has placed its fate in the hands of its shareholders.

The Vancouver-based company issued a statement saying it will make no recommendations to its shareholders concerning the acceptance or rejection of Boliden’s (BOL.IR-T) offer of $5.40 per share.

Westmin’s “worldwide search” for alternative offers has come up empty and, at presstime, the board believed it unlikely that a last-minute offer would materialize before the Boliden bid expired (at 5 p.m. on Jan. 21, the day this issue went to press).

“We continue to believe that the company’s long-term underlying value is grater than $5.40,” said Westmin Chairman Terry Lyons, “and that current metal prices and equity markets for mining companies are at a low point.” Meanwhile, Boliden’s takeover bid has been approved under the Investment Canada Act. The major also has announced the purchase of 8,800 Westmin shares at $5.30 each, giving it 6.4 million shares, or 6.7% of the outstanding Westmin shares.

Toronto-based Boliden, a 44.9%-owned subsidiary of Sweden’s Trelleborg, launched its takeover bid on Dec. 1 in an attempt to capture Westmin’s principal assets, namely, the Lomas Bayas copper project in Chile and the Myra Falls zinc-copper and precious metal mine on Vancouver Island, B.C.

Westmin’s financial advisor, RBC Dominion Securities, believes Boliden’s offer is inadequate. The securities firm stated that, “in the absence of the successful completion of the offer or another offer for the outstanding common shares, trading value of Westmin common shares would likely be lower than $5.40.”

Said Lyons: “It is possible that a refusal by shareholders to accept the Boliden offer could cause the market value of Westmin shares to return to, or below, the pre-offer level.”

Westmin’s issues sold for $3.98 per common share on the day prior to the takeover bid.

Boliden recently raised its total stake in Westmin to about 12% by acquiring another 3 million shares at $5.30 each. Boliden now holds 6.7% directly and an additional 5.5 million shares through a lock-up agreement with Altamira Management. Boliden can still walk away from it all if it receives less than 66.66% of Westmin’s 95 million outstanding shares.

The directors and senior officers of Westmin have indicated that they will not tender their shares to the Boliden offer.