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Cyprus Amax Accepts $1.8B Takeover

October 1, 1999

PHOENIX (AP) _ Cyprus Amax Minerals Co. agreed to a sweetened $1.8 billion cash and stock offer from Phelps Dodge Corp., ending their six-week takeover battle.

Phelps Dodge, the nation’s largest copper producer, said the merger with Cyprus, announced Thursday, would create a lower-cost global copper producer and allow the companies to integrate operations in the Southwest.

Phelps Dodge raised its bid to $19.74 a share from $19.02 to persuade Cyprus Amax to abandon its plans to merge with rival Asarco Inc.

``We are extremely pleased that we were able to reach a negotiated agreement with Cyprus Amax that is clearly in the best interest of both companies,″ said Douglas C. Yearley, Phelps Dodge chairman and chief executive.

Phelps Dodge originally made a tandem offer in August to acquire Asarco, and also was rebuffed. Yearley said he is still interested in acquiring the New York-based copper producer.

But he now must beat out a higher bid from Mexico’s top copper producer, Grupo Mexico SA.

Asarco spokesman Jerry Cooper declined to comment on the Phelps Dodge-Cyprus deal, saying only that Asarco intended to explore ``all alternatives available.″

Phelps Dodge offered $7.61 in cash and 0.2203 of a Phelps Dodge share for each Cyprus Amax share. Shareholders of Cyprus Amax will have the option of receiving $20.54 a share in cash for their stock, or 0.3550 Phelps Dodge shares for each Cyprus Amax share they hold.

``We expect the copper markets will improve in a year or two and that means the stock prices for Phelps Dodge will increase,″ said John Taraba, a Cyprus vice president.

The deal could close as early as mid-October.

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