Barrick Gold Corp has not ruled out raising its C$7.3 billion ($7.68 billion) bid for Equinox Minerals , saying it will take a wait and see approach if China's Minmetals Resources <1208.HK> fights back with a higher offer.

Shares in Minmetals, a unit of China's largest metals trader, were placed on a trading halt in Hong Kong with the company expected to respond to Barrick's rival bid later on Tuesday.

An unsuccessful capital raising by Minmetals in Hong Kong last week prompted speculation it might not have the funding in place to formally launch the C$6.3 billion offer it announced earlier this month.

State-owned Chinese firms also traditionally do not get drawn into bidding wars.

However, some analysts said they expected Minmetals to respond with a higher offer. One source close to the deal said Minmetals chief executive Andrew Michelmore was under pressure to secure a deal although noted the company was having funding issues.

Michelmore is liable to lose, and I have to use a Chinese expression here, a hell of a lot of face if he doesn't get a deal away, said the source, who was not authorized to talk publicly about the deal.

Canada's Barrick, the world's largest gold miner, announced an agreed offer for Equinox on Monday, seeking to tap surging demand from China and other developing economies that has pushed prices up more than sevenfold in the past eight years.

Barrick Chief Executive Aaron Regent said it was too early to speculate on how it would respond to a bidding war with Minmetals but highlighted his company's strong balance sheet and access to debt.

We put what we think is a fair offer on the table and the Equinox board and management think so as well and we have their endorsement. If there is another bid coming we will have to wait and see, Regent told reporters on a conference call.


Barrick offered to buy Equinox for C$8.15 a share, an 8.7 percent premium over its Thursday closing price. The all-cash bid is 16 percent higher than Minmetals' earlier offer.

Equinox shares jumped 11.6 percent in Toronto on Monday and closed at C$8.37, only about 2.6 percent higher than Barrick's offer, indicating investors were divided about a higher offer emerging.

China has too much hot cash and the state policy is to encourage domestic companies to go out buying resources, said Zibo Chen, an analyst at Kingsway Financial Services Group. He would not speculate on whether Minmetals will raise its offer but said. Even if they fail this time, the company will continue to seek opportunities overseas, he said.

Equinox, a global miner listed in Canada and Australia, owns the Lumwana mine in Africa's rich Zambian copper belt and most of the Jabal Sayid project in Saudi Arabia.

This is a unique opportunity, an opportunity to acquire a large copper production base with expansion potential in an attractive region, Regent said.

Equinox had previously called the C$7-a-share Minmetals offer a low-ball bid. On Monday it said it believes the Barrick bid is superior in terms of price and its likelihood of completion.

In Australia, markets were closed for a public holiday. Trading resumes on Wednesday.

Minmetals said it would not comment on the Barrick offer until it had studied the details.


Barrick would use about half of the $4 billion in cash they have on their balance sheet to fund the deal, Regent said. The balance would be funded with debt, revolving credit facilities and new bonds.

Regent, who has a background in base metals, sees the takeover bid as an opportunity to gain access to the Zambian copper belt at a time when copper prices are expected to keep climbing to fresh records. London copper hit an all-time high above $10,000 a tonne in February and traded near $9,700 on Tuesday.

Barrick will double its position in copper with the acquisition while reducing Barrick's exposure to gold to 80 percent from a current 90 percent.

Regent said the company's focus remained on copper and gold and that it was not planning on expanding into other commodities at this stage.

Equinox's Lumwana mine is Africa's third-largest copper operation by production and the Jabal Sayid development is due to start production next year.

(Additional reporting by Alison Leung in HONG KONG; Editing by Lincoln Feast)