UPDATE 1-Inmet Mining denies takeover talks, shares slide
* Inmet says not in talks to sell company, major assets
* Denial follows speculative report in British newspaper
* Daily Mail suggests Inmet held talks with First Quantum
* Shares close down 5.32 percent at C$54.44 on TSX
(Adds analyst comment)
Nov 13 (Reuters) - Canada's Inmet Mining Corp said on Tuesday that it is not in talks with any party about a sale of the company or a substantial part of its assets, contradicting a British media report, and its shares fell 5 percent.
The statement from the base metal miner followed a report late on Monday on the website of the Daily Mail newspaper that suggested the company had held informal tie-up talks with larger rival First Quantum Minerals Ltd.
The newspaper article, which was unsourced, speculated that a takeover bid could be worth as much as C$5 billion (US$5 billion). Inmet's market capitalization, as of the close of the market on Monday, was nearly C$4 billion.
Shares of Inmet closed down 5.32 percent at C$54.44 on Tuesday on the Toronto Stock Exchange after the company denied the takeover rumors.
The Toronto-based miner said it remained focused on the construction and development of its $6.2 billion Cobre Panama project in Central America.
Despite the denial, a deal between First Quantum and Inmet could make sense, BMO Capital Markets mining analyst Stephen Bonnyman wrote in a note to clients on Tuesday.
``First Quantum trades at a decided premium to its peer group and Inmet at a discount, making a potential deal quite accretive on many measures,'' he said, adding that Inmet is attractive due to its size and its stake in Cobre Panama.
``The potential acquisition would maintain First Quantum's copper focus while substantially diversifying its geographic concentration,'' Bonnyman said.
First Quantum operates copper mines in Zambia and Mauritania, and a nickel mine in Western Australia. Its stock closed down 2.46 percent at C$22.19 on Tuesday.
Inmet owns copper mines in Turkey, Spain and Finland, and holds an 80 percent stake in the Cobre Panama project in Panama, with the remaining interest held by a Korean consortium.
The company confirmed earlier this month that it remained open to selling another minority stake in that project.
Inmet recently backed away from a takeover of its own after its C$130 million hostile bid for Petaquilla Minerals Ltd failed to secure shareholder support.
($1=$1.00 Canadian)
(Reporting by Julie Gordon; Editing by Janet Guttsman; and Peter Galloway)