Teck launches Inco takeover

TAKEOVER fever continues but this time it is at the top end of town with the world’s largest zinc producer Teck Cominco launching a $C17.8 billion ($A20.8 billion) hostile takeover bid for Canadian cousin Inco.
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Toronto, Canada

Ben Sharples

Teck president and chief executive Donald Lindsay said the takeover would create a “Canadian powerhouse on the world stage”, with the financial strength and management skills to capitalise on its portfolio of projects.

Under the bid, Teck is offering Inco shareholders $C78.50 ($A102) per share in cash or shares – $C28 in cash and 0.629 of a Teck Class B subordinate voting share – which is conditional on Inco not completing its announced takeover bid for Falconbridge.

Since it was announced in October, the Inco-Falconbridge merger has been delayed three times to allow US and European competition authorities to review the deal.

The transaction would make Teck the world’s second-largest nickel miner; the world’s second-largest producer of seaborne hard coking coal; the largest indium producer; and a significant producer of copper, gold, silver, platinum, palladium, cobalt and molybdenum.

However, the move has not impressed Falconbridge.

“We are surprised that Teck Cominco has taken this step to interfere in our transaction and will review the implications of what they have done,” Falconbridge chief executive Derek Pannell said.

In a statement, Inco said its board would review the formal offer from Teck Cominco when it is made available.

“Inco remains committed to its friendly, value-creating transaction with Falconbridge and to meeting its obligations under the support agreement with Falconbridge,” Inco said in a statement.