While confident shareholders would turn down the Inmet offer, Petaquilla chief executive Joao Manuel said Petaquilla was prepared for the possibility of Inmet acquiring a substantial stake in the company.
Manuel said Monday that Petaquilla will work with Inmet to resolve issues over land rights and rights of way as well as try to sell them supplies and services.
"I think there will be plenty of opportunity to work together and try to do the best for our two companies," Manuel said in an interview from Vancouver.
Shareholders face a deadline of 11:59 p.m. PT on Monday night to tender their shares to Inmet's offer after talks between the companies over the weekend failed to reach a deal.
Inmet's offer is seen as a move to consolidate the area around its Cobre Panama project.
Petaquilla's Molejon project neighbours the US$6.2-billion Cobre Panama copper-gold porphyry project, Panama's largest-ever mine development.
Inmet said Monday "limited discussions" took place between the companies, but were unsuccessful.
"For those Petaquilla shareholders that elect the share alternative, we look forward to welcoming you as shareholders of Inmet and benefiting from the strong financial position of Inmet," Inmet president and chief executive Jochen Tilk said in a statement.
Manuel said the talks focused on the possibility of spinning off some of Petaquilla's assets into a new company, with Inmet acquiring the others.
However, he said, the structure was complicated and the company did not have the time to examine just how it would be done and the tax consequences for investors.
"We don't want to close that door because depending on what happens at the end of the day today, I would like to revisit those scenarios again and see what we can do to improve on the value for shareholders," he said.
"I think it can be done on a very friendly basis."
Based on Inmet's recent share price, the current offer is valued at about $147 million.
Inmet has offered Petaquilla shareholders 0.0118 of an Inmet share plus 0.1 of a cent in cash. Alternatively, shareholders may also choose to receive up to 60 cents in a combination of cash and shares based on a Inmet share price of $50.82.
Inmet shares closed down 21 cents at $55.96, while Petaquilla shares were unchanged at 64 cents on the Toronto Stock Exchange.
Inmet, which reports its results in U.S. dollars, reported last week a quarterly profit attributable to shareholders of $116.2 million, or $1.68 per share, up from $98 million, or $1.41 per share, a year ago.
The increase came as sales grew 29 per cent to $327.2 million compared with $253.4 million in the same quarter last year.
BMO Capital Markets analyst Stephen Bonnyman raised his price target on Inmet stock to $71.50 from $70 and reiterated an "outperform" rating on the company after the earnings report.
"The solid results confirm the improving operations at Las Cruces, and BMO Research views the results as critical to the company’s valuation from a credibility perspective," Bonnyman wrote in a note to clients.
"We have increased 2012 forecasts reflecting the very strong quarter, and revised upwards earnings and cash flows for 2013."