Metals miners HudBay and Lundin announce $814-million merger plan

TORONTO — Zinc miner HudBay Minerals Inc. (TSX:HBM) is buying Lundin Mining Corp. (TSX:LUN) in a friendly deal that creates one of Canada's biggest publicly traded base-metals companies.

Under the deal, Vancouver-based Lundin will become a wholly owned subsidiary of HudBay, which is offering stock valued at $814 million when the transaction was announced early Friday.

Late Friday, the transaction was rejected by a HudBay institutional shareholder, Toronto merchant bank Jaguar Financial Corp. (TSX:JFC), which said it planned its own conditional offer to take over HudBay.

In a side deal, HudBay is lending C$135.8 million to Lundin, which will use the cash for its operations. The debt will later be repaid in Lundin shares representing about 19.9 per cent of the total.