TORONTO (AFP) - China Minmetals Corp has entered into exclusive talks to acquire mining group Noranda, the Canadian firm announced.
Noranda said that after a special committee review of "a number of proposals from various parties" it granted Minmetals exclusivity to examine the company's finances and negotiate a takeover deal.
Minmetals' preliminary proposal "reflects a small premium to the recent trading level of Noranda's common shares," Noranda said, and would include cash and the distribution to shareholders of some Noranda holdings, most likely its aluminum business.
There were no other details of the bid released.
The talks included the Canadian holding company Brascan, which specializes in copper, nickel, zinc and aluminum production.
Noranda had been reported in July to be the target of Brazilian mining giant Companhia Vale do Rio Doce (CVRD), which was purportedly prepared to pay two billion dollars (US) in cash and offer the Sossego copper mine in the Amazon.
"I am encouraged by our discussions and hope to be able to crystalize value for current shareholders of Noranda. This proposed transaction represents an opportunity to enter an exciting new period of growth and development, said Derek Pannell, president and chief executive of Noranda.
"China Minmetals is a highly respected global organization with a strong commitment to the mining and metals industry."
Miao Gengshu, president of China Minmetals, was quoted in the statement as saying, "We are pleased that our proposal to acquire Noranda has been selected for exclusive negotiations. As we assess this possible transaction, we are applying the highly disciplined investment approach that has served us well in past initiatives."