Cyprus Amax Accepts $1.8B Takeover
PHOENIX (AP) _ Cyprus Amax Minerals Co. accepted a sweetened $1.8 billion offer from Phelps Dodge Corp., the nation’s largest copper producer, ending their six-week takeover battle.
Phelps Dodge 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Phelps Dodge originally made a tandem offer in August to acquire Asarco, and also was rebuffed.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.
Shares of Phelps Dodge fell 25 cents to $55.06 1/4 Thursday on the New York Stock Exchange, where shares of Cyprus rose 37 1/2 cents to $19.62 1/2.