Lumina Copper and its Taca Taca copper porphyry in northern Argentina was purchased by First Quantum Minerals on June 17 for about $470 million, or $10 a share. Lumina shareholders have three options to tender their shares – $10 cash, $5 cash and .2174 of a First Quantum share, or the all-share offer of .4348 of a First Quantum share. The amounts are based on June 16 closing prices ($21.65 for First Quantum).
Thanks to a surge in First Quantum stock since and the wonders of arbitrage, Lumina Copper shares are now trading at $10.30 a share, a healthy 3% higher than the offer price. The price of copper has rocketed up about 10% in the past month, and First Quantum shares are trading at $25, up more than 12% in the same time frame and at 52-week highs.
It adds up to a nice sweetener for Lumina Copper shareholders, particularly those – like me – who had planned to take the cash offer.
Thanks, Ross Beaty. Thanks First Quantum.
UPDATE: The First Quantum/Lumina Copper deal seems to be the gift that keeps on giving. Lumina closed the week at $10.61, a 6% premium to deal terms. Yes, I sold too early.
Please read my disclaimer. This is not investment advice.