Jun 2 2006
Teck Cominco Limited responded today to the announcement by Inco Limited that Inco’s Board of Directors has recommended to Inco shareholders that they not tender to Teck Cominco’s takeover bid for Inco.
“Over the past two weeks we have met with most of Inco’s major shareholders to present our offer and have received enthusiastic support,” said Don Lindsay, President and Chief Executive Officer, Teck Cominco. “In addition to the cash they will receive, they are excited at the opportunity to participate in the new Teck Cominco.”
“Inco continues to trade with our premium reflected in its share price. When we announced our offer on May 8, 2006, it represented a premium of 27.8% and 20.1% to the 30-day volume weighted average price and closing price, respectively, of Inco's shares as at May 5, 2006,” he added.
“Despite continuing high commodity prices, shares of all base metal mining companies unaffected by takeover activity have declined quite significantly since our offer. In this environment, if Inco's share price had not been supported by our offer and it performed, for example, in line with the average of the three largest diversified mining companies, its share price would likely have declined by about 13% from its C$65.38 closing price on May 5.”
“We remain confident that our offer is a better deal for Inco shareholders than the proposed Inco/Falconbridge combination and is the only compelling choice to fully maximize shareholder value.”
On May 8, 2006 Teck Cominco announced that it was making an offer to acquire all of the outstanding common shares of Inco on the basis of, at the election of each holder, Canadian C$78.50 in cash or 0.9776 of a Class B subordinate voting share of Teck Cominco and C$0.05 in cash for each common share of Inco subject, in each case, to pro ration. Teck Cominco’s offer is conditional, among other things, on the support agreement between Inco and Falconbridge Limited dated October 10, 1005, as amended, having been lawfully terminated in accordance with its terms, and Inco’s takeover bid for Falconbridge having been lawfully withdrawn or terminated without any shares of Falconbridge having been purchased pursuant to such takeover bid, in all cases without breach by Inco. Full particulars of the offer are set out in the offer and circular and related materials mailed to Inco shareholders in connection with the offer.
Highlights of Teck Cominco’s offer include:
- Inco shareholders to receive C$78.50 per share in cash or shares based on the price of Teck Cominco Class B shares on May 5, 2006: C$28.00 in cash and 0.6293 of a Teck Cominco Class B share at full pro ration;
- Offer represents a premium of 27.8% and 20.1% to the 30-day volume weighted average price and closing price, respectively, of Inco shares as at May 5, 2006;
- Transaction is expected to be accretive to Teck Cominco ’s earnings and cash flow per share;
- New Teck Cominco will be led by a well-respected, disciplined management team with an exemplary track record of creating and enhancing shareholder value;
- New Teck Cominco will have an extensive portfolio of long-life, low-cost assets, a well-sequenced growth profile and substantial capacity to fund growth internally.