The takeover battle for Inco (N-T, N-N) is heating up, with Brazil’s Companhia Vale do Rio Doce (CVRD) (RIO-N) emerging as a third bidder with an all-cash, C$86-per share offer, valuing the nickel miner at C$17 billion.
The offer is a quarter below Inco’s closing price in Toronto of $86.25 on Aug. 10, the day before the bid. Inco shares have since popped up to $88.75 in mid-morning trading on Aug. 11.
As of mid-morning on Aug. 11, CVRD’s offer still came in third behind the cash-and-stock bids from Teck Cominco (TCK.B-T, TCK-N) and Phelps Dodge (PD-N).
CVRD’s offer will be open for 45 days after it is formally launched next Monday, and is contingent two-thirds of Inco’s shares being tendered. The deal also requires regulatory approvals.
In a manner similar to the Phelps offer, CVRD says it will create a global nickel business based in Toronto if the deal is completed, and continue Inco’s investments in new mines and research.
The combined assets of CVRD and Inco would create one of the world’s three largest diversified mining companies, with substantial postions in iron ore, nickel, ferroalloys, bauxite, alumina and manganese. It would have a market capitalization around US$70 billion at current stock prices.
Teck’s revised, fully pro-rated offer amounts to $40.00 in cash and 0.5821 of a class B share, and is currently due to expire Aug. 16. In mid-morning trading on Aug. 11, the new bid values each Inco share at $86.10, based on Teck’s intra-day share price of $79.20 in Toronto.
Phelps is offering Inco shareholders $20.25 plus 0.672 of one of its own shares for each of their shares. In mid-morning trading on Aug. 11, the offer was worth $92.41, based on Phelps’ share price of US$91.96 in New York.
CVRD will be holding a conference call about the deal at 2 pm ET on Aug. 11.
Be the first to comment on "CVRD joins Inco bidding war"