Phelps’ bid clears U.S. hurdle

Phelps Dodge‘s (PD-N) has received early U.S. antitrust clearance for its proposed US$40-billion acquisition of Inco (N-T, N-N).

The U.S. Department of Justice and the Federal Trade Commission have granted early termination of the 30-day waiting period under the Hart-Scott-Rodino Antitrust Act.

Phelps is offering Inco shareholders $17.50 in cash plus 0.672 of one of its own shares for each Inco share tendered. The bid is part of a larger three-way deal that would see Phelps swallow Inco and Falconbridge (FAL-T, FAL-N), should those two consummate their planned nuptials. Inco’s sweetened offer of $17.50 plus 0.55676 of a share expires on July 13.

Phelps’ bid for Inco is facing competition from Teck Cominco (TCK.B-T, TCK-N), which has offered $28.00 in cash accompanied by 0.6293 of a Teck class B share. Teck’s offer is contingent on Inco scrapping its plans with Falconbridge; the bid expires on July 24.

Falconbridge is also being pursued by Swiss-based Xstrata (XSRAF-O, XYA-L), which recently increased its cash bid to $59; that offer expires on July 21. Xstrata already owns just shy of 20% of Falconbridge.

Shares in Inco were $1.73 higher at $76.28 in late-morning trading in Toronto following the news on July 12; Falconbridge was up 64 at $60.74, and Teck was $1.19 richer at $71.39. For its part, Phelps advanced US96 to US$82.71 in New York. In London, Xstrata was 92 better at 2,113 pence.