Central African Mining & Exploration Company (CAMEC) said on Monday it planned to make an all-share bid for Canada's Katanga Mining, valuing the target at 773.1 million pounds ($1.56 billion).
CAMEC -- which operates in the Democratic Republic of Congo (DRC) -- said it would offer 15 of its shares for every Katanga share, valuing its target at 990 pence per share based the CAMEC's closing share price on Friday.
CAMEC shares were up 0.8% at 66.5 pence, valuing it at 816.7 million pounds.
CAMEC already owns 22% of fellow DRC-focused Katanga, which has previously asked Canadian regulators to block any attempt to add to the stake.
Anu Dhir, Vice President, Corporate Development of Katanga, said that CAMEC had not yet made an offer, so there was nothing yet for the company to consider.
She added that the company's objection to the stake-building did not mean it was against a full takeover offer -- just deal-making with individual shareholders.
"What was happening was a creeping takeover -- we think if the company wants to make an offer it should be to all shareholders," she told Reuters in an interview.
A spokesman for CAMEC would not add to the company's statement, which said that further announcements would be made in due course, but a source familiar with the situation said a formal bid would be made as soon as possible.
CAMEC's shares took a plunge in May after the Congolese authorities criticized its corporate governance -- a row linked to Zimbabwean businessman and CAMEC stakeholder Billy Rautenbach.
The company was co-founded by former England cricketer Phil Edmonds.