Phelps Dodge lifts bid for nickel miners
PHELPS Dodge has sweetened its offer for nickel mining rivals Inco and Falconbridge by $C2.75 ($3.24), hoping to thwart an increased hostile bid for Falconbridge by Switzerland’s Xstrata.
In turn, Inco raised its bid for Falconbridge by $C1 a share on Sunday and, in an attempt to dissuade shareholders from accepting Xstrata’s offer, Falconbridge’s board said it would pay a special dividend of C75c to anyone holding its stock on July 26, five days after Xstrata’s offer is to expire.
Phelps Dodge, which announced a $US40 billion ($53.2 billion) friendly merger arrangement with Inco and Falconbridge last month, has been under pressure to raise its offer. Before Phelps Dodge’s offer, Inco and Falconbridge had already planned to merge but that transaction was in question because Xstrata had made an offer for Falconbridge.
Xstrata is offering $C59 a share in cash. Inco’s cash-and-stock offer will now be worth $C60.19, based on its closing price in Friday’s trading.
Phelps Dodge had to increase its offer or risk losing the deal.
Inco said on Thursday that “while a growing number of acceptances were received over the course of the last week”, it did not appear that it would receive the two-thirds of Falconbridge’s shares its bid required.
The New York Times
