Jul 27 2006
Xstrata announces that it has today received notice from the Minister of Industry that Xstrata's acquisition of control of Falconbridge Limited has been approved by the Minister under the Investment Canada Act. Xstrata’s all cash offer to the shareholders of Falconbridge Limited is therefore not subject to any further regulatory review.
Commenting, Xstrata CEO Mick Davis said, “I am pleased that Xstrata has been able to demonstrate the benefits to Canada of our successful acquisition of Falconbridge.
“Today’s announcement effectively removes the last remaining regulatory hurdle to our acquisition of Falconbridge. Given the overwhelming support of Xstrata’s shareholders for this acquisition at the first shareholders’ meeting, on-going positive feedback from our shareholders and the undertakings already received to vote in favour of the transaction at the next meeting, I have no doubt that the resolution will be passed at the Xstrata general meeting on 14 August enabling us to take up and pay for any shares tendered to Xstrata’s offer.
“The outcome of this transaction therefore lies – as it should – in the hands of the Falconbridge shareholders themselves. Set against the continuing significant market and commodity risk inherent in the Inco offer, particularly given Inco's significantly higher leverage post transaction, and the high degree of uncertainty around the completion of Phelps Dodge offer, Xstrata’s all cash offer provides clear and certain value for Falconbridge shareholders and an opportunity to bring this prolonged process to a close, to the benefit of all Falconbridge stakeholders. I therefore urge all Falconbridge shareholders who wish to receive the full cash value of C$62.50 per share to tender their shares to Xstrata as soon as possible and not to tender to the Inco offer.
“Following approval by Xstrata shareholder’s on 14 August 2006, Xstrata will immediately take up and pay C$62.50 in cash for all shares tendered under our offer. We anticipate that all tendering shareholders will receive their all cash consideration within three business days from 14 August, at least one full month in advance of the earliest possible payment under the proposed Phelps Dodge paper and cash deal for which a closing date has not even been set.”