Xstrata PLC said Thursday it plans to increase its stake in Falconbridge Ltd., and will buy an additional 5 per cent of the company's common shares, starting tomorrow.
The Swiss miner said in a release that it planned to buy Falconbridge stock from July 28 until the expiry of its $19-billion takeover offer. Xstrata already owns about 20 per cent of Falconbridge.
”The purchase of up to 5 per cent of Falconbridge common shares on market will be undertaken with the sole aim of assisting Xstrata to achieve its consistently stated objective of acquiring 100 per cent of Falconbridge common shares,” Xstrata said in a statement.
On July 19, Xstrata raised its hostile offer for the 80 per cent of Falconbridge it does not own to $62.50 per share in cash from $59.
Overlooking Minera Alumbrera's open pit (Xstrata handout)
Related Articles
Internet Links
Falconbridge has agreed a friendly cash-and-stock offer from Inco, backed by U.S.-based Phelps Dodge Corp., which expires at midnight (PST) Thursday. The move was expected following a June 30 Ontario Securities Commission decision overturning a Falconbridge shareholder rights plan that would have blocked such purchases.
Falconbridge said Thursday it continues to encourage shareholders to tender their shares to the Inco offer.
"Xstrata's announcement this morning concerning its intention to acquire another 5 per cent of Falconbridge common shares on the market confirms what we have been saying all along," said Falconbridge chief executive officer Derek Pannell, in a release "We believe the purchase of additional shares will effectively end the auction process currently taking place. Therefore, it is critical for Falconbridge shareholders to tender today to the Inco offer for it to succeed."
Inco's cash-and-stock proposal was worth $65.34 per share at Wednesday's prices.
Xstrata's bid was cleared by Canadian foreign-ownership regulators Tuesday, while Phelps Dodge, which last week said would not support Inco in a sweetened bid, still needs approval of its offer from Investment Canada and its own shareholders.
Atticus Capital LP, one its biggest investors, has said it will vote against the merger, expressing concern over the amount of debt Phelps Dodge would incur.
Inco is also the target of a hostile bid from Vancouver miner Teck Cominco Ltd.
-with files from Canadian Press
33
