The directive “considerably compresses M&A optionality and doubtlessly restricts financing choices for Canadian miners,” Scotiabank analysts Orest Wowkodaw and Eric Winmill stated in a Monday be aware. “Consequently, we now anticipate most Canadian miners to commerce at decrease valuation multiples versus world friends.”
The brand new directive suggests that enormous Canadian-headquartered firms together with Cameco Corp., Teck Assets Ltd., Ivanhoe Mines Ltd. and Lundin Mining Corp. “at the moment are off-limits to potential international consumers,” the analysts wrote. Different firms named had been First Quantum Minerals Ltd., Hudbay Minerals Inc., Capstone Copper Corp. and Ero Copper Corp.
The S&P/TSX Supplies Index, which incorporates metals producers, fell 1.1% Monday, with a lot of the firms named by Scotiabank’s analysts main the decline.
“That is clearly designed to stop the identical destiny skilled by the final technology of enormous Canadian miners, particularly Alcan, Falconbridge-Noranda, and Inco,” they wrote, referring to the flurry of international takeovers 18 years in the past that took out a few of Canada’s greatest metals producers of the day.
(By Jacob Lorinc)