First Quantum Minerals have announced that speculation around the potential sale of a minority stake in the company as well as a takeover bid or other change of control are immaterial at this moment, according to a SENS announcement.
“FQM is aware of speculation regarding a potential transaction involving Jiangxi Copper Co. Limited”, the company acknowledged in a press release issued by Company President Clive Newall on 25th September 2019. “The company confirms that discussions regarding a potential sale of a minority interest in FQM Zambia’s copper assets have occurred and are continuing.” These discussions are in no way a signal that a deal has been struck as “no transactions have been agreed upon and there is no guarantee that a transaction has been achieved.”
Speculation of the minority stake sale has been rife following a Reuters article that indicated that a “Jiangxi Copper source had said that the company had recently bought a stake of almost 10% in First Quantum on the secondary market, below the threshold for disclosure for Toronto-listed companies”. The article further indicated that the proceeds from such a sale would be used to reduce FQM’s debt. “A minority stake in First Quantum’s Zambian assets – Kansanshi and Sentinel – could fetch about $2 billion, according to Scotiabank analysts”, according to Reuters. “A deal would enable the company to repay debt at the same time production at its massive Cobre Panama copper mine gears up”.
Clive Newall’s issued statement also rebuffed speculation regarding a possible takeover following the firm’s 12% stock price slump on the Canadian Stock exchange mid-September 2019. “There FQM has not engaged in any discussions regarding a takeover bid or other change of control transaction and has no knowledge of potential take-over bids, change of control transactions or proposals.”