Antofagasta (LON:ANTO) shares headed higher in early deals on rumours of a merger with Teck Resources, even though the two mining companies denied they are currently having talks.
A report by Bloomberg news on Monday, citing unidentified people with knowledge of the matter, reported that Teck and London-listed Antofagasta had explored a merger.
The news sent Vancouver-based Teck shares soaring before the company issued a statement denying it was having takeover talks, while FTSE 100 firm Anto confirmed the same this morning.
Both miners have extensive copper operations in Chile and a tie-up would create one of the world's biggest copper producers with the potential to cut costs across both businesses.
Teck is Canada’s third-largest mining group after Goldcorp and Barrick Gold and is valued at C$11.2bn, while Anto as a market value of £7.3bn.
Rumours of a merger come amid a weak outlook for commodity overall. Copper prices have fallen about 8% in the past 12 months and hit a five-year low in January.
Broker Investec said: "Whilst such a deal could make sense for Teck which has reportedly been looking to expand copper exposure, we would be surprised if Anto’s major shareholder (the Luksic family c. 65%) would have been supportive of diluting control of the company unless they were seeking an eventual exit that seems unlikely."
Antofagasta shares added 21p to 760p early on Tuesday.
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