First Quantum Shares Rally amid Takeover Bid Rumors

Shares of First Quantum Minerals rallied on Wednesday, recovering some of their recent losses following reports of a potential takeover bid by Barrick Gold. In afternoon trading, the shares surged 13% to C$13.56, reducing the year-long drop to 52%.

First Quantum's Slump and Possible Takeover

First Quantum, with a market capitalization of approximately CAD 9.39 billion ($7.05 billion), experienced a significant decline in share price between late October and mid-December after Panama President Laurentino Cortizo announced plans to shut down the company's large copper mine in the country.

According to Bloomberg News, Barrick CEO Mark Bristow recently reached out to some of First Quantum Minerals' major investors to gauge their support for a potential takeover. Bristow expressed confidence in Barrick's ability to manage First Quantum's African mines and resolve the issues faced in Panama.

It is worth noting that First Quantum had previously rejected an informal takeover approach from Barrick.

Barrick's Interest in Expanding Copper Portfolio

Barrick's interest in First Quantum is driven by its desire to expand its copper portfolio. While Barrick CEO Bristow has previously emphasized organic growth opportunities, the recent move suggests a potential shift in strategy.

First Quantum's Response and Legal Protection

In response to the closure plan for the Cobre Panama mine, First Quantum has vowed to take all necessary legal action to protect its investment and rights in Panama. The government's decision follows a court ruling that declared a law passed by the National Assembly in October as unconstitutional. The law had recently approved a revised contract between the mining company and the Panamanian government. First Quantum has invested over $10 billion in building the mine, along with a port and power station in Panama.