SolGold rejects Jiangxi takeover bid amid copper deals frenzy

[Ben Graham]

Ecuador-focused miner SolGold (LON: SOLG) revealed on Friday it had rejected a a preliminary and conditional takeover offer from China’s Jiangxi Copper Co, the second received in less than a week.

Shares in the gold and copper mining firm jumped 14%, closing at 29.55 pence each on Friday in London.

Jiangxi Copper, already SolGold’s largest shareholder with a 12% stake, proposed 26 pence per share. The miner’s board had unanimously rejected a separate non-binding proposal from the Chinese group on November 23.

“The SolGold board remains confident in SolGold’s standalone prospects,” the company said in a statement. It advised shareholders to take no action while it considers next steps.

SolGold has long been viewed as a potential target for major Western miners such as BHP (ASX: BHP) and Newmont (NYSE: NEM), which hold stakes of 10.4% and 10.3% respectively. Interest from these majors cooled after disputes over funding the Cascabel copper-gold project, in northern Ecuador, and revisions to its scope. 

Copper tensions run high with global market at ‘historic point’

Under the UK Takeover Code, Jiangxi has until 17:00 GMT on December 26 to declare whether it will make a firm offer, SolGold said.

The renewed approach comes as copper assets draw heightened attention amid forecasts of a looming supply crunch tied to global electrification, a backdrop that has fuelled a wave of attempted deals including BHP’s failed bid for Anglo American (LON: AAL) last week.