Today, after twenty-four hours of speculation, Equinox Minerals  launched a hostile bid for Lundin Mining. The move temporarily leaves Symterra blowing in the wind. What is Symterra you ask? That is the proposed name of a new entity resulting from the friendly merger of Lundin Mining and Inmet Mining – a transaction valued at $9 billion.

Yesterday, the Globe and Mail reported that an unsolicited offer was in the works. Equinox then requested its shares be halted on the Australian Stock Exchange before that market opened on Monday, “pending the release of an announcement by the company”.  This morning, Lundin Mining confirmed that Equinox Minerals had indeed made an offer to acquire Lundin for approximately $4.8-billion in cash and shares of Equinox.  The consideration per common share of Lundin Mining was offered at $8.10 in cash or 1.2903 shares of Equinox plus one cent for each Lundin Mining common share. The offer would be subject to a proration maximum cash consideration of approximately $2.4-billion and maximum Equinox share consideration of 380 million.

The rival bid effectively puts both Lundin and Inmet in play and has the potential of sparking a memorable takeover battle in the base metals sector.  The bid from Equinox comes just two weeks before Lundin and Inmet shareholders are set to vote on their proposed deal.

A takeover offer from Equinox is likely to renew the debate concerning foreign corporate takeovers of Canadian-based mining companies.  In mid-November 2010 BHP Billiton announced it had withdrawn its $38.6 billion unsolicited takeover offer for the Potash Corporation of Saskatchewan, the world’s biggest producers of a crucial fertilizer ingredient, after the Canadian government stone-walled the potential deal.  Both Potash and the Saskatchewan government fiercely lobbied Canada’s Conservative government to block the deal, citing what amounted to national security concerns. Potash produces about half of the world’s supply of the eponymous material and generates significant revenue for the Saskatchewan government.

On November 3, 2010 when the Canadian federal government formally scuttled the Potash deal for not representing a “net benefit” for Canada.  The decision was made under the Investment Canada Act, which vests authority under the industry minister and requires only that companies show a “net benefit” to Canada – a somewhat subjective assessment.  Industry Minister Tony Clement gave the Australian mining giant a 30 day window to restate its case and make any additional representations to Ottawa but BHP Billiton elected to terminate the offer and forgo the red tape.

With the Equinox offer today yet another Australian company is taking a run at a high profile Canadian mining company. Investors clearly think this takeover has a better chance of succeeding. Shares of Lundin Mining closed at $7.65 today, up $1.20, or nearly nineteen percent.