By Robb M. Stewart

Sierra Metals is again urging shareholders to reject the advances of Alpayana after the privately-held Peruvian miner sweetened its hostile takeover bid.

The Canadian copper producer said the revised offer from Alpayana continues to undervalue Sierra and the board recommends investors reject the "opportunistic" bid. Sierra said non of its officers or directors have or plan to offer up their shares to Alpayana.

The new bid, which valued Sierra at roughly 235 million Canadian dollars ($164.7 million), was described by Alpayana as best and final, and is set to expire April 25.

"The board believes there is far greater value inherent in the company's assets, particularly in light of our strong financial and operating performance," Sierra Chair Miguel Aramburu said.

The copper miner added Alpayana has continued to repeat several unsubstantiated claims in its offer, including calling into question the reliability of Sierra's financial guidance.

Sierra affirmed its target for earnings before interest, taxes, depreciation and amortization of about $130 million this year, which would mark growth of 75% over 2024.

Last week, Alpayana said it was now offering C$1.11 a share for Sierra, up from its earlier C$0.85 a share approach. It also waived the condition requiring at least 66 and 2/3% of Sierra shares be tendered to its offer and conditions related to financial metrics set out in Sierra's 2024 financial statements.

The family-controlled company said Sierra faces significant challenges and its offer represents compelling and certain value. Sierra is entering a hostile macro-economic environment with a vulnerable balance sheet and lack of scale, with high levels of expensive debt, Alpayana said.

Alpayana said it expects that Sierra may need to undertake a capital raising of more than $60 million just to normalize its working capital position. In response to the statement, Sierra said it disregards the significant improvement in its balance sheet and an outlook for increased cash generation.

The bid comes as mining companies around the world are looking to secure attractive copper deposits as demand for the industrial metal grows.

Sierra's shares last closed at C$0.85 in Toronto, up a little more than 1% in the new year and 2.4% over the last 12 months.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 09, 2025 08:13 ET (12:13 GMT)

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