Phelps Dodge offer for Inco equivalent of $80 a share
Could deter other bids
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Scott Hand, CEO of Inco, is trying to fend off a Teck Cominco bid.
Photograph by : Photo by Peter Redman
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Font: * * * * Drew Hasselback and Carrie Tait, National Post
Published: Monday, June 26, 2006
Another week -- and another round of premium price offerings for
Canadian mining shares.
Investors will awake to news today that Phelps Dodge Corp. has
presented the market with a two-step deal that raises the stakes in
the pursuit of control for both Inco Ltd. and Falconbridge Ltd.
Phoenix, Ariz.-based Phelps Dodge has presented Inco's board with a
takeover offer that values the company at the equivalent of $80 in
cash and stock.
For Inco shareholders, the takeover would represent a 60% gain over
the company's share price since October, when the Falconbridge merger
was proposed.
That transaction assumes the successful completion of a sweetened
deal to merge Inco and Falconbridge, both based in Toronto.
Falconbridge investors who hang on to those Inco shares would wind up
receiving the equivalent of $62 a share.
That's more than double the $28 a share that Switzerland-based
Xstrata PLC paid in August to buy a 20% stake in Falconbridge from
Brookfield Asset Management.
A market source said yesterday that the Phelps Dodge plan could be
rich enough to deter further bids. Inco has been fending off an
unsolicited bid from Vancouver-based Teck Cominco Ltd. Xstrata,
meanwhile, has tabled its own hostile bid for Falconbridge.
The battle for control of the Canadian base metals industry was
expected to come to a head this week.
Xstrata is set to challenge Falconbridge at a hearing before the
Ontario Securities Commission tomorrow. Inco's bid for Falconbridge
bid was set to expire Friday.
Mining shares have performed reasonably well over the past year on
the back of strong metals prices. Yet the takeover battles obviously
haven't hurt valuations, either.
The fun began last August, when Brookfield decided to exit the metals
business and sell off its stake in Falconbridge.
The buyer was Xstrata, which paid $2-billion for the 20% stake, then
said it wanted to be something more than a minority shareholder in
Canada's largest mining company.
Xstrata signed a nine-month agreement that would have forced it to
top up the amount it paid to Brookfield by the difference of any
higher bid it might have made for the remaining 80%.
That sent Falconbridge looking for a potential white knight. Inco was
the answer, and the two companies announced a friendly merger
proposal last October.
Combining Inco with Falconbridge would create the world's largest
nickel miner. Inco and Falconbridge had hoped to close the
transaction in February, but competition regulators in Europe held up
the deal.
That pushed the timing beyond the expiry of Xstrata's standstill
agreement with Brookfield. Once it was free and clear of its
obligations to Brookfield, Xstrata hit the street with an all-cash
offer of $52.50 a share for the 80% of Falconbridge it didn't already
own.
Yet two key events took place before Xstrata launched its bid.
In early May, Teck Cominco launched an unsolicited bid for Inco. At
Friday's close, the bid values Inco at $67.24 a share.
Just days later, Inco sweetened its offer for Falconbridge by 11%,
bringing the implied value for Falconbridge shares to $51.17.
--- In obrolan-bandar@yahoogroups.com, "up_trends" <[EMAIL PROTECTED]>
wrote:
>
> INCO INCO INCO, ada yg punya berita terakhir? apa benar sudah 100%
> mau ditakeover?
>
> --- In obrolan-bandar@yahoogroups.com, EKA SUWANDANA <esuwandan@>
> wrote:
> >
> > PER bakal membesar bukan karena harga naik. Tapi laba/eps
mengecil.
> Semua proyek PTBA materialised tahun 2009. Saya rasa tahun ini PTBA
> bakal sideways lama 4 bulanan. Tapi bodoh saya, kalo nggak
ngumpulin
> dari sekarang. Yg dibahas orang2 hanya PLTU2 yg sahamnya dimiliki
> PTBA, itu berarti cuma 3 PLTU. Bozz sudah tahu lebih dulu ternyata
> ada tambahan 3 PLTU lagi yg dipasok.
> >
> > Halim Mintareja <hmin918@> wrote: saran saja...
> >
> > dulu sih waktu <3000 sangat tepat untuk beli PTBA.. apalagi
waktu
> itu PGAS >12.000.. konversi PGAS ke PTBA 1:4+
> >
> > Sedangkan di harga sekarang...
> >
> > PE PGAS < 20.. padahal output PGAS diharapkan tumbuh 2X di
bulan
> october 06.. dan 2X lagi di bulan Agustus 07
> > Jadi PGAS diperdagangkan pada harga PE 5-7 expected earning
dari
> 2007.. cukup murah sekali.
> >
> > Emiten lagi
> > ASII.. PE 8-9.. padahal sales udah bottom.. tahun depan minimal
> naik 10-20%. Jadi diperdagangkan di expected PE 7 untuk 2007
> >
> > Lagi..
> > TLKM... PE (operating profit) 15.. dengan grow yang stabil di
20-
> 30%. Kalau ditarik rata-rata 25% sampai 2009 berarti di expected PE
7-
> 8 untuk 2009
> >
> > Belum lagi ketiga emiten tersebut membagikan deviden yang
lumayan
> untuk tiap tahunnya sampai 2009
> >
> > Balik lagi ke PTBA.. kalau sekarang bermain di PE 35-40 itu
sama
> saja terlalu optimis... di PE 25-30 seperti sekarang udah cukup..
> >
> > ngak akan kemana-mana... belum lagi kalau berita jelek mulai
> keluar.. pasti dapat tekanan sepanjang tahun... apalagi kalau asing
> mau masuk... bisa dibantai abis ke bawah.. mirip PGAS dulu yang
dari
> 1.300 ke 1.100 dengan berita-berita super jelek beredar mulai dari
> TV, surat kabar radio.
> >
> > Nah saran saya.. saat ini
> > jangan tambah barang di PTBA... terlalu berat... kalau tambah
> berarti bikin kesempatan orang untuk tekan.
> > Jangan pasang BID.. bikin bandar bisa keluar aja... kalau
memang
> betul-betul mau tambah hajar kanan saja.
> > Kalau ada kesempatan SOS... pindah ke 3 saham di atas. Ntar
tahun
> 2007 tengah balik lagi ke PTBA.. pasti kondisi sudah lebih baik.
> >
> > ----- Original Message -----
> > From: EKA SUWANDANA
> > To: obrolan-bandar@yahoogroups.com
> > Sent: Wednesday, June 21, 2006 1:49 PM
> > Subject: [obrolan-bandar] PTBA Keep Buying asalkan tahan lihat
> PER membesar selama 1 tahun ini.
> >
> >
> > UTK PTBA yg laba bersih akan mengecil sampai akhir tahun
ini.
> PTBA PER-nya bisa bermain di atas 35-40x. Memang menakutkan. Tapi
> ingat PGAS tahun lalu PER-nya sempat dikisaran 50x. Tetap diburu
dan
> ternyata sekarang terbukti, ada dikisaran belasan.
> > So PTBA asal bia tahan sampai 2008-2009 sambil melihat
> perkembangan crash program pemerintah. Bakalan seperti PGAS. Jangan
> takut tahun 2008 tahun pemilu, SBY ingin meninggalkan kenang2an
PLTU
> 10000MW sbg legacy.
> >
>
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