Canadian company Lundin Mining has offered $122.7 million in cash and shares for Irish mining company Arcon.
The boards of the companies have agreed terms of the deal in which Lundin will take the entire issued share capital of Arcon for $63 million cash and offer 5.6 million Lundin shares.
Based on the current issued share capital of both companies, this would result in Arcon shareholders having a 14 per cent post merger share of Lundin.
Sir Anthony O'Reilly, Arcon's principal shareholder, has advised that an offer on these terms would be acceptable to him.
The proposed offer values Arcon at 53.8 cents per share per share, a discount to yesterday's closing price, though the shares have rallied recently on speculation of a takeover bid.
Arcon added that the offer price represents a 32 per cent premium on the average price over the past 12 months.
The combined group will produce about 152,000 tonnes annually and lead to production of some 46,000 tonnes.