Investment Canada has extended by 30 days its review of Phelps Dodge‘s (PD-N) proposed acquisition of Inco (N-T, N-N). The extended review period began on Aug. 21; Phelps’ plan has already faced 45 days of examination by Investment Canada.
The extension was revealed in Phelps’ latest filing with the U.S. Securities and Exchange Commission on Aug. 23. The new review period ends on Sept. 19 — after Inco and Phelps shareholders vote on the planned acquisition on Sept. 7 and Sept. 25. Some of Phelps’ major shareholders have consistently said they plan to vote against the scheme, as it is too dilutive and debt-laden.
Phelps’ bid of $20.25 in cash plus 0.672 of one of its own shares valued Inco shares at around $86.64, based on Phelps’ share price of US$89.00 in late-afternoon trading in New York on Aug. 23. Shares in Inco were unchanged at $86.25 in Toronto, while CVRD was off US$1.02 at US$20.79 in the Big Apple.
Another date to keep in mind is Aug. 29, that’s when Inco has to come out for or against a competing, $86-per-share bid from Brazil’s Companhia Vale do Rio Doce (CVRD) (RIO-N). So far, Inco has remained neutral on the offer, and has invited CVRD to the negotiating table, as Inco says the offer “could reasonably be expected to result in a superior proposal.”
CVRD’s offer is also subject to approval by Investment Canada. The Brazilian figures it should pass muster, as its operations are complementary to Inco’s, and it currently does not produce any nickel.
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