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Inco responds to Xstrata's increased offer

In the wake of Xstrata PLC's increased bid to acquire Falconbridge Ltd., Inco's chairman and CEO Scott Hand issued a written statement on Inco's website July 11.
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In the wake of Xstrata PLC's increased bid to acquire Falconbridge Ltd., Inco's chairman and CEO Scott Hand issued a written statement on Inco's website July 11.

“Inco’s offer for Falconbridge remains the best alternative on the table for Falconbridge shareholders, both in terms of immediate and long-term value creation," said Hand.

Xstrata has increased its fully underwritten all-cash offer to acquire all of the outstanding common shares of Falconbridge Ltd. not already owned by the Xstrata group from $52.50 to $59 (in Canadian funds) in cash per Falconbridge share, or a total consideration of approximately $18.1 billion.

The expiry time for the increased Xstrata offer is Friday, July 21 at midnight (Vancouver time).

"The implied value of our offer for Falconbridge under our friendly three-way agreement with Falconbridge and Phelps Dodge is $61.65 per share, based on today’s (July 11) mid-day share price for Phelps Dodge.  This represents a premium of 4.5 percent above the Xstrata offer," said Hand.

“Inco’s offer, unlike Xstrata’s, also provides the only opportunity to fully capture the outstanding synergies available in the Sudbury Basin and elsewhere.

"To date, the synergies identified through the Phelps Dodge Inco combination are estimated at $900 million annually, with a net present value of $5.8 billion. By bringing Inco and Falconbridge operations together in Sudbury, Phelps Dodge Inco is the only transaction that offers significant new opportunities for investment, growth and employment in the Sudbury Basin."


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