UPDATE 1-Hudbay terminates deal to acquire Lundin
Mon Feb 23, 2009
NEW YORK, Feb 23 (Reuters) - HudBay Minerals (HBM.TO) said on Monday it has terminated its agreement to acquire Lundin Mining (LUN.TO), as it believes its shareholders would not approve of the deal given current market conditions.
The companies had hoped to close the takeover by Jan. 28, but an Ontario Securities Commission ruling last month that HudBay must allow its shareholders to vote on the plan made it increasingly unlikely that the deal would go through.
HudBay's shares fell about 40 percent after the takeover was announced in November. Some stakeholders, including major shareholder SRM Global Master Fund, had voiced opposition.
HudBay had planned to issue 153 million shares to pay for Lundin. This had become a bone of contention with HudBay's shareholders as it would have doubled HudBay's issued shares.
HudBay will retain the 19.9 percent ownership stake in Lundin, which it acquired in December 2008. (Reporting by Euan Rocha)
