First Quantum / Inmet - hostile manouevres Just in time for Christmas - a hostile takeover. First Quantum, a Canadian copper miner listed in London and Toronto, has leapt on Inmet, a fellow Canadian. After the latter publicly rejected its earlier approach in November, First Quantum has returned, launching a slightly sweetened C$5.1bn (US$5.2bn) cash-and-stock bid to Inmet's shareholders. This could be a lengthy fight. First Quantum wants to reduce its existing exposure to the geopolitical risks associated with investing in Africa (Zambia and Mauritania), where it derives two-thirds of its earnings. Its ambition is to be a global miner, and its eye is firmly on Inmet's Cobre Panama asset, a $6bn copper mine in Central America that is one of the last large projects not owned by a big mining group. Cobre Panama is also one of the most expensive: its minerals cost $23,000 a tonne to extract, against $6,000 a tonne at First Quantum's Sentinel project in Zambia. First Quantum's C$72-a-share offer is a 36 per cent premium to Inmet's undisturbed share price but broadly in line with other copper acquisitions measured by enterprise value as a multiple of total resources, Nomura estimates. The question is whether it fairly values Inmet, which last week upgraded Cobre Panama's copper and gold reserves by 27 per cent and 41 per cent, respectively. So, relative to reserves, First Quantum's new bid is actually below its November offer. First Quantum can afford to play a long game: it has net cash of $350m, and even allowing for a $2.5bn credit facility its net debt would be below 1.5 times earnings before interest, tax, depreciation and amortisation after acquiring Inmet at C$72 a share. But it is a risky deal. First Quantum has not been given access to Cobre Panama for due diligence, so it cannot know how much it could shave off development costs. And Panama is new territory. First Quantum has more work to do.