Canadian-based mining firm Breakwater Resources has agreed to be taken over by the world's biggest zinc producer, Belgium's Nyrstar, in a deal worth $663 million. Nyrstar will pay $7 cash per share for Toronto-based Breakwater, representing a 44 per cent premium to the closing value of its shares Tuesday. That makes the basic purchase price worth $619 million. As well, a special dividend will be paid to Breakwater shareholders one business day before the deal closes. This dividend will be worth 50 cents a share, or a total of $44 billion. Breakwater is a miner of zinc, copper, lead and gold. Nyrstar is the world's biggest producer of zinc.
Breakwater's largest shareholder, Dundee Corp., which has a 22.1 per cent stake, has tendered its shares in favour of the deal -making it unlikely another bidder will trump Nyrstar's all-cash offer.
Belgium-based Nyrstar has been aggressively pursuing pure-play miners in Canada in the past year to become self sufficient. Nyrstar acquired Canada's Farallon Mining in November, but was outbid by Japan's Toho Zinc for Australian miner CBH Resources.
Breakwater had proven and probable mineral reserves of about 19.7 million tonnes at end 2010. It expects to produce about 95,000 tonnes of zinc in 2011 from its mines in Chile, Honduras and British Columbia.
