The offer of the Swiss who already control 19

Already well blurred, the part of the merger of Canadian mining cross projects is become even more complex with the arrival of the American Phelps Dodge ("Les Echos" from June 27), world's leading producer of copper rated on the stock market, in the circle of candidates for consolidation with Inco and Falconbridge. Monday, Phelps Dodge launched a friendly bid on Inco intended to oust a coup two hostile proposals of the other Canadian Teck Cominco on Inco and Xstrata Falconbridge, himself engaged on Switzerland for long months in a process of consensus unification with Inco.

But just three days after the launch of the project of consolidating three of Phelps Dodge, it lost part of its appeal. First of all because the action of market forces, which have severely penalized the offer of the American dépréciant title of 6. In view of the joint structure of the proposal (0,672 action Phelps Dodge 17.5 Canadian dollars in cash per share Inco) and the evolution of the courses of the two companies since the announcement of Phelps Dodge, the lower spring offer from 9.2 to the price of the Inco action at the close of Wednesday. Last Friday, it was almost 3 higher. Moreover, the powerful unions of Canadian children, who have supported with enthusiasm the rapprochement between Inco and Falconbridge, have expressed their opposition in a group three piloted by Phelps Dodge.

The transaction hostile Teck Cominco on Inco, whose details were made public on May 8, has not better either. It underestimates the target of 14 per cent (0,9776 action Teck Cominco 0.05 Canadian dollar per share Inco). Only remains out of the water its option all in cash (78.5 dollars by action Inco, rated Wednesday, 70,61 dollars), which is however capped at $ 6.4 billion.

Xstrata remains in ambush

In addition, the continuation of the project of Teck Cominco is conditioned on the abandonment of a friendly merger between Inco and Falconbridge, which, in the State, is not the order of the day, especially after the green light given to him by the American competition authority and the probable and imminent Commission European.

The initial consolidation between Inco and Falconbridge which served trigger for the largest stock-market battle of all time in the mines, it is not really staggering from a strict point of view stock. And this, even after the revision increased by its terms (0,55.676 action Inco 17.5 dollars per Falconbridge share) occurred at the same time as the launch of the Phelps Dodge Inco on offer. Always on the basis of the closing price of Wednesday, Inco is confined to concede its prey shareholders a premium of just 1.

All say that the hostile Xstrata on Falconbridge proposal (52.5 Canadian dollars in cash by action Falconbridge, namely 7.6 lower than the price of Falconbridge of Wednesday) 17 May is not buried. The offer of the Swiss, who already control 19.4 of the Canadian, the advantage to be all in cash. But she met serious Union objections and policy to the Canada.

In any event, Xstrata maintains a strong power of nuisance to the marriage scheduled between Inco and Falconbridge, whose finalization is subject to the favourable vote of at least 66.7 of the shareholders of Falconbridge. However, in view of Xstrata participation in the capital of the latter, Inco must win a minimum of 83 of the votes of the shareholders of its partner. This is difficult if one keeps in mind that about 55 of the Falconbridge shares are in the hands of investors Canadian, insensitive to the theme of economic patriotism.

In total, the three combinations considered around Inco and Falconbridge cannot be easily decided upon both items for and contrast balance. This is why analysts estimate that in addition to the strong likelihood of a bid on the part of Xstrata or / and Teck Cominco, other scenarios are possible, including the offer of Xstrata on Teck Cominco, after bullion its participation in Falconbridge, or that of direct intervention in this case of a major in the sector.