Jul 21 2006
Inco Limited (“Inco”) today responded to the announcement by Xstrata plc that it had increased the consideration under its unsolicited offer for Falconbridge Limited.
The Inco Offer for Falconbridge now consists of Cdn.$18.50 in cash and 0.55676 of an Inco common share, assuming full proration of the consideration under the Offer. Assuming the completion of both the Inco Offer and the combination between Inco and Phelps Dodge, and together with the Falconbridge special dividend, Falconbridge shareholders would receive an implied total consideration on a “look-through” basis of Cdn.$64.92 per Falconbridge common share, consisting of approximately: (a) Cdn.$29.77 in cash; and (b) 0.3741 of a Phelps Dodge Inco Corporation common share, valued the closing price of the Phelps Dodge common shares on the New York Stock Exchange and applicable U.S.-Canadian dollar exchange rates on July 19, 2006. This is $1.67 more than the value of the Xstrata offer of $63.25 per share, including the Falconbridge special dividend.
“This is our best and final offer for Falconbridge”, said Mr. Hand. “It provides greater value than the competing offer from Xstrata, and it is available for acceptance only until midnight (Vancouver time) on Thursday, July 27. Xstrata’s competing offer remains subject to a variety of conditions, including Investment Canada approval and shareholder approval, and will not be available for acceptance until at least August 14.
“Only Inco’s Offer gives both current Inco and Falconbridge shareholders the opportunity to participate in the earnings, cash flow and growth potential of Phelps Dodge Inco. For these reasons and others, we strongly encourage Falconbridge shareholders to tender their shares to Inco’s increased Offer,” he said.