Southern Copper Agrees to Buy Frontera

Grupo Mexico’s Southern Copper has agreed to acquire Frontera Copper for CAD0.65 per share or about CAD42m in cash, the target says. In early December, Invecture Group, a mining-sector focused fund that manages $600m and owns about 21% of Frontera, had offered CAD0.59 per share, but Frontera balked, calling the move opportunistic. The offer is conditional on the deposit of at least 66.7% of the outstanding Frontera shares and regulatory approvals. The deal is expected to close no later than February 13. Both mining companies operate in Mexico. Copper trades at about $1.52 per pound, down from highs of over $4.00 per pound in June. Frontera has hired RBC as its exclusive financial advisor, while UBS is advising Southern Copper.