HudBay Minerals Completes Take-over of Augusta Resource Corporation
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Goodmans represented HudBay Minerals Inc. (“Hudbay”) in connection with its take-over of Augusta Resource Corporation ("Augusta").
On February 9, 2014, HudBay announced its $540 million hostile take-over bid for Augusta. Following a hearing before the British Columbia Securities Commission, a panel of the Commission unanimously determined that, unless Augusta confirmed that it had terminated its shareholder rights plan, the Commission would cease trade the rights plan (and any securities issued thereunder) effective as of July 15, 2014. The Commission's order was conditional upon Hudbay extending its offer to expire no earlier than July 16, 2014 and providing for a 10-day extension of its offer if it took up any common shares of Augusta (“Augusta Shares”) thereunder.
On June 23, 2014, Hudbay and Augusta announced that they had entered into a support agreement pursuant to which Hudbay agreed to increase the consideration to be received by Augusta shareholders under the offer to include, in addition to the 0.315 of a common share of Hudbay originally offered by Hudbay, 0.17 of a warrant to acquire a common share of Hudbay for each Augusta Share, representing consideration with a value of approximately $3.56 per Augusta Share. The revised offer represented a total equity value of $555 million for the Augusta Shares. Augusta’s Board of Directors unanimously recommended that Augusta shareholders accept the revised offer and agreed to terminate the rights plan to permit them to do so.
Hudbay took up 116,233,761 Augusta Shares under the revised offer on July 17, 2014 and an additional 6,100,762 Augusta Shares on July 29, 2014, which together with the Augusta Shares already owned by Hudbay, represents approximately 96% of the issued and outstanding Augusta Shares. The revised offer has terminated and Hudbay acquired, through a subsequent acquisition transaction, the remaining Augusta Shares for the same consideration per Augusta Share as was paid under the revised offer.