Copper Companies Tell Phelps Dodge to Up Ante
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PHOENIX — Cyprus Amax Minerals Co. and Asarco Inc. said Wednesday that they will consider an unsolicited takeover bid from Phelps Dodge Corp. to form the world’s biggest copper producer--if their suitor boosts its all-stock proposal by 29% to $3.32 billion.
Cyprus and Asarco, which had already agreed to merge, Friday rejected a $2.57-billion Phelps Dodge bid. On Wednesday, they asked Phelps Dodge to increase the amount of stock it would pay to 0.53 share for each Asarco share, valued at $30.54, and 0.4055 share for each Cyprus share, or $23.36. Phelps is trying to remain the No. 1 U.S. copper producer, a position threatened by the Cyprus-Asarco deal.
“I think Phelps Dodge will prevail,” said St. James Securities analyst Ray Goldie in Toronto. “Cyprus and Asarco shareholders will . . . say, ‘We’d rather have our assets managed by Phelps Dodge.’ ”
The target companies’ proposal values Cyprus at $2.11 billion, a 36% premium to Wednesday’s closing price. It values Asarco at $1.21 billion, a 42% premium.
In New York Stock Exchange trading, Cyprus shares fell 63 cents to close at $17.19, Asarco fell $1.19 to close at $21.44 and Phelps Dodge declined $2.19 to close at $57.63.
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