NP says Jaguar calls HudBay's Lundin bid a "bailout"

2008-11-24 07:10 ET - In the News

See In the News (C-JFC) Jaguar Financial Corp

The National Post reports in its Saturday, Nov. 22, edition that shortly after HudBay Minerals said Friday it was making a friendly all-stock deal to buy Lundin Mining, Jaguar Financial revealed its plan to take over HudBay. The Post's Peter Koven writes that Jaguar chairman Vic Alboini said the merchant bank had its eye on HudBay for a few months now. The offer for Lundin, however, spurred Jaguar to act. Mr. Alboini said Lundin is saddled with unprofitable mines, too much political risk and solvency issues. "This offer is basically a bailout of Lundin," he said. As an alternative, Mr. Alboini is proposing a two-stage transaction using principal notes. The first stage would return all of HudBay's cash to shareholders, minus $10-million. Then he would sell the remaining assets and return those proceeds to investors as they are sold. Many HudBay shareholders agree with Jaguar that the Lundin merger is a bad idea. Investors knocked the stock back 40 per cent right after the deal was announced Friday. The Post says HudBay's plan angered many shareholders because they like the miner as a low-risk operation with plenty of cash on its balance sheet to survive the tough times.