Cobar’s Endeavor Mine owner CBH Resource Ltd has rejected a takeover proposal by Belgium-listed Nyrstar and instead will allow Japan’s Toho Zinc to increase its shareholding in the mid-tier silver, lead and zinc producer.

According to The Australian newspaper, CBH Resources has opted for a $67.5 million joint venture deal with its largest shareholder in preference to a rival full takeover bid by Belgium smelter operator Nyrstar.

Japan’s Toho Zinc, which has a 23.1 per cent stake in the minor, has agreed to buy a 50 per cent stake in CBH’s lead/zinc Rasp project at the Broken Hill mine for $57.5m.

CBH will also raise $10m through a share placement to Toho at 20c a share, 48 per cent above CBH’s last closing price.

Nyrstar’s offer of 13.5c a share values CBH at $220m.

CBH has not engaged in talks with Nyrstar and said last week that, based on the existing proposal, it did not intend to hold substantive discussions with the company.

“Given the current trading price of CBH shares, the implied value ascribed to Rasp from the transaction with Toho and the underlying value for Endeavor and the company’s other assets, the proposal from Nyrstar clearly does not reflect the value of CBH shares, nor does it provide any upside for our shareholders,” managing director Stephen Dennis said in a statement.

The Toho Zinc deal also includes an offer from CBH to buy back its convertible notes which would reduce the company’s debt by $98.8m to $22.4m, the newspaper reported. The deal still has to be approved by shareholders.