Canadian miner Hudbay Minerals (TSX, NYSE: HBM) responded to media reports about it being in talks to buy Chile's Mantos Copper by saying that while it avoids commenting on market rumours, its strategy does include growth opportunities, such as acquisitions.
Private equity-backed Mantos Copper said in July it was looking for a buyer to help it finance the expansion of mines it bought from Anglo American in 2015.
News of the talks didn't sit well with Waterton Global Resource Management, one of Hudbay's largest shareholders, which called for a moratorium on any mergers and acquisitions.The Chilean miner's owner, a consortium led by British investment company Audley Capital Advisors and Orion Mine Finance Group, grabbed the Mantos Blancos and Mantoverde copper mines from Anglo for $300 million plus $200 million in conditional future payments.
According to Bloomberg, Mantos Copper could fetch as much as C$1 billion ($780 million) and Hudbay Minerals is so far the only interested part. The anonymous sources quoted in the article said that while talks were advanced, they could still fall apart and other bidders may emerge.
Their words may prove true as Waterton Global Resource Management, which owns about 4.8% in Hudbay, called on the Toronto-miner's board Friday to "immediately terminate any discussions or plans to execute the Mantos transaction and any other material acquisitions in the near future."
"Our informed, unyielding view is that under no circumstances should Hudbay be engaging in any material acquisitions at this time, including any transactions that could adversely impact shareholders, the company's balance sheet, and/or the company's ability to effectively progress its current portfolio of assets," Waterton, one of Hudbay's largest shareholders, said in the statement.
Shares in Hudbay were hit by the news, dropping more than 6.3 percent in Toronto to C$5.79 at 12:39 pm ET and more than 7.53 percent in New York to $ 4.42 by 12:54 p.m. ET.