Teck Cominco offers to buy IncoPublished by MAC on 2006-05-08
Source: Globe and Mail
Teck Cominco offers to buy Inco
TAVIA GRANT / Globe and Mail
8th May 2006
TORONTO - Canadian miner Teck Cominco Ltd. on Monday offered to buy rival Inco Ltd. for $17.8-billion in cash and stock, a move that would create the world's largest zinc miner and second-largest nickel producer.
The deal is contingent on Inco not completing its own proposed $12.5-billion offer for rival Falconbridge Ltd., made in October.
Vancouver-based Teck Cominco said it had been in takeover discussions with Inco last year, prior to Inco's Falconbridge bid. Teck Cominco already owns 8.9 million Inco shares.
"Our offer presents an attractive opportunity for Inco's shareholders in comparison to the Inco/Falconbridge transaction," said Teck Cominco's president and chief executive, Donald Lindsay. "Market sentiment indicates that the price required to ultimately acquire Falconbridge may be materially higher than the current Inco bid."
Under terms of the deal, Inco shareholders will receive $78.50 in cash or shares, a 20.1-per-cent premium over Friday's close. The offer is comprised of $28 in cash and 0.6293 of a Teck Cominco Class B share."Under our offer, Inco shareholders will receive a significant premium for their Inco shares, rather than seeing their company pay a premium to acquire Falconbridge."
The company sees cost savings of more than $150-million annually. Teck Cominco would finance the cash part of the offer using cash and an underwritten bridge facility.