Apparently experiencing the change of heart that a higher bid can generate, the Frontera Copper Board of Directors Sunday announced that they have decided to support the higher offer of Mexican hedge fund Invecture Group S.A. de C.V. over that of white knight Southern Copper Corp (SCC).
In a news release, the board said it determined Invecture's Cdn 75-cents per share offer is superior to the Cdn$0.65 per share offer previously received from Southern Copper Corp.
Under the terms of the support agreement executed between SCC and Frontera, SCC had the right to match a superior offer, but did not exercise its right within the stipulated five day-calendar period, the board said, noting that the enhanced Invecture offer represented a 15% increase over that offered by Southern Copper and a 27% improvement in the price originally offered by Invecture.
Southern Copper's decision not to make a higher offer, ran contrary to a theory advanced by Haywood Securities earlier this month that SCC had at least one higher bid left to offer. Haywood's analysts had suggested that Southern Copper's interest in Frontera stems from the company's parent Grupo Mexico, which supplies sulphuric acid to Frontera's Piedras Verdes operation.