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Globe says Augusta is probably stuck with this offer

2014-02-11 08:02 ET - In the News

See In the News (C-AZC) Augusta Resource Corp (2)

The Globe and Mail reports in its Tuesday edition there was a time when nothing was better than getting a hostile bid for your mining company shares. The Globe's Boyd Erman writes, however, being put into play these days likely means an offer at prices they would rather not think about. For Augusta Resource, now staring down a $540-million hostile offer from HudBay Minerals, few white knights are lurking in the background. Bidding wars are unlikely and the expectation from bankers and analysts is simply that the hunted will do well to extract anything more than the standard bump of a few per cent. Targets can grouse about insulting offers that undervalue their assets and the other rhetoric that gets trotted out at times like this. Unfortunately for Augusta, Canadian shareholders rarely say no when there is a passable premium on the table. Laurentian Bank analyst Christopher Chang estimates Augusta is probably worth about $1 more than the $2.96 at which HudBay's offer was initially valued, but that probably will not matter. "While we believe Rosemont is an attractive asset with very robust economics, the number of white knights in a position to trump HudBay's proposal is relatively limited," Mr. Chang wrote.