UPDATE 1-Inmet turns down First Quantum bid, adopts rights plan
* Inmet says offer values company at C$70 a share
* Inmet says First Quantum bid not in shareholders' best interests
* Inmet shares close up 17.65 percent at C$62 on TSX
* First Quantum shares close down 1.6 percent at C$20.80
(Adds background, share close, analyst comment)
TORONTO, Nov 28 (Reuters) - Inmet Mining Corp said on Wednesday that it had turned down a C$4.86 billion (US$4.89 billion) unsolicited takeover bid from its larger rival First Quantum Minerals Ltd, sending Inmet shares up more than 17 percent.
The Canadian base metal miner, which is building the massive Cobre Panama copper mine in Central America, also said it had adopted a shareholder rights plan, giving it more time to evaluate bids and potentially seek alternatives to a takeover.
In addition to its 80 percent stake in Cobre Panama, Inmet owns operating mines in Turkey, Spain and Finland.
"Inmet doesn't need a dance partner," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services in Toronto. "Inmet is happy to go it alone and build what may be the premier copper mine to come on-stream in the latter half of this decade."
Under First Quantum's proposed cash and share offer, the company would have paid up to C$2.461 billion in cash and issued a maximum of 112.679 million shares, in a deal that valued Inmet at C$70 a share, or C$4.86 billion, Inmet said.
"After reviewing the proposal with its financial and legal advisors, Inmet's board of directors has today notified First Quantum that it has declined to pursue the proposal as it is not in the best interests of Inmet shareholders," the company said in a statement.
First Quantum was not immediately available to comment.
The Toronto-based miner also said on Wednesday that the offer, which was made on Nov. 25, followed a previous unsolicited offer from Vancouver-based First Quantum that valued Inmet's shares at C$62.50. Inmet said it had turned down the first bid.
Trading in Inmet stock was halted on the Toronto Stock Exchange at C$52.70 ahead of the news on Wednesday afternoon. The shares rose as high as C$65.00 after trading resumed and closed up C$9.30 at C$62.00. That was well below Inmet's 52-week high of C$70.34 in January.
Shares of First Quantum closed down 1.6 percent at C$20.80.
Inmet denied earlier this month that it was in talks with First Quantum on a takeover. 1/8ID:nL1E8MDB5X 3/4
($1 = 0.9936 Canadian dollars)
(Additonal reporting by Claire Sibonney in Toronto; Editing by Leslie Adler)