(Bloomberg) -- The head of Nevsun Resources Ltd. said other companies besides Lundin Mining Corp. have expressed interest in acquiring the company, though it’s not formally for sale.

Peter Kukielski, chief executive officer of Vancouver-based Nevsun, said the company has attracted a lot of interest from potential buyers since the prefeasibility study on its Timok copper and gold project in Serbia was completed.

“One thing we’ve made consistently clear to everybody is that we will evaluate all offers but you have to come in through the front door and buy the whole company,” Kukielski said in a telephone interview. He declined to name the other interested parties.

On Monday, Lundin and its partner Euro Sun Mining Inc. disclosed an unsolicited offer to acquire Nevsun for C$2 in cash, C$2 worth of Lundin Mining stock and C$1 of Euro Sun’s shares. Lundin said in a statement it believed its “proposal is extremely compelling and in the best interests of Nevsun shareholders.”

Nevertheless, the C$1.5 billion ($1.2 billion) bid was rejected by Nevsun.

“The fundamental reason is that No. 1, it doesn’t value the company appropriately, or adequately, and No. 2, it presents a structure that is highly problematic,” Kukielski said.

Tax Hit

In particular, he said it would dilute Nevsun shareholders’ exposure to Timok and leaves Euro Sun, which would largely be owned by Nevsun holders, with about a C$100 million tax bill and transaction costs. Kukielski said the uncertainty of a Euro Sun shareholder vote on the transaction was another deterrent. “So, it’s not really a C$5 offer,” he said. 

Representatives for Lundin and Nevsun weren’t immediately available for comment.

Kukielski said the company isn’t officially for sale but they did grant Lundin access to its data rooms for a month in March, and held several meetings with its technical teams and management. Nevsun is open to any proposal that would create value for shareholders, he said.

Nevsun was clear with Lundin that any offer must be for the whole company and paid for with cash and Lundin shares, Kukielski said. None of the offers that were proposed were for the whole company or in just cash and Lundin stock, he said.

In addition, Nevsun shareholders have said the C$5-a-share offer is not adequate, he added. He said the company sees greater value in building out its Timok and Bisha projects on its own.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Jacqueline Thorpe, Steven Frank

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