Sept. 24, 2004
TORONTO - China Minmetals Corp. has entered into exclusive negotiations to buy all of the shares of Noranda Inc., one of Canada's oldest mining companies.
Noranda has market capitalization of $6.5 billion
Minmetals has already made a preliminary proposal that includes "a small premium" on the recent trading price for Noranda shares, the companies announced Friday.
Noranda shares were down 46 cents to $22.14, while shares of holding company Brascan, which owns 42 per cent of Noranda, was down 25 cents at $39.00
Noranda said the preliminary proposal from Minmetals consists "substantially of cash." The proposal also calls for the spinoff of Noranda's aluminum business to shareholders.
Without providing further details, the companies said the Minmetals offer is non-binding and offered no guarantee that a deal will be finalized.
Noranda has received 'a number of proposals'
"I am encouraged by our discussions and hope to be able to crystalize value for current shareholders of Noranda," said Derek Pannell, the president and CEO of Noranda.
"This proposed transaction represents an opportunity to enter an exciting new period of growth and development," he added.
Noranda announced in June that it had received several expressions of interest in the company from potential buyers.
A special committee of the company had been reviewing "a number of proposals" and selected Minmetals as the company it wanted to try to reach a deal with.
Noranda is one of the world's biggest nickel and zinc producers, with major operations in Sudbury, Timmins, Quebec and New Brunswick. The company had 2003 revenues of $4.7 billion US. It owns 59 per cent of nickel and copper producer Falconbridge.
China Minmetals Corp. had 2003 revenues of $11.7 billion US. It is owned by the Chinese government.
Written by CBC News Online staff
http://www.cbc.ca/story/business/national/2004/09/24/noranda_040924.html