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| Sterlite to match rival bid for Asarco, to seal deal in 4 mths |
| Press Trust of India / New Delhi Apr 29, 2009, 15:29 IST |
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NRI billionaire Anil Agarwal-led Sterlite Industries will compete with any rival bidder to buyout America's third-largest copper producer Asarco, for which it has already offered $1.7 billion, and said it sees the deal getting sealed in the next 3-4 months.
"...There always can be a competing bid and if that happens we have a right to match it," Vedanta Resources Deputy Executive Chairman Navin Agarwal said during an analyst conference.
Asarco's parent firm Grupo Mexico has offered USD 1.3 billion in cash, rivaling Sterlite's USD 1.7-billion bid, which has a cash component of $1.1 billion, to gain control of the bankrupt copper miner
A US bankruptcy court had last week approved Sterlite's revised buyout pact with Asarco. Sterlite now expects the deal to be sealed in the next four months.
"...As a first step towards completion of the transaction , the bankruptcy court has approved the revised agreement and has certain bid protection measures like break-up fee. We think it will take another three to four months to complete the transaction, subject to court approval," he said.
Agarwal said Sterlite Industries "continues to remain excited" at the opportunity of buying Asarco.Barely a month after Sterlite Industries signed a buyout pact with Asarco for $1.7 billion, rival Grupo Mexico came up with a counter offer of $1.3 billion in cash to retrieve its ailing unit out of bankruptcy and pay back the creditors.
The creditors will have to approve one of the bids for Asarco so that the court can take a final call on the matter.
Sterlite, the Indian subsidiary of London-listed Vedanta Resources, has been negotiating the Asarco deal since last year. It had initially offered $2.6 billion for buying the assets of the ailing company, which has been bankrupt for over four years now.
However, with the devaluation of mining assets and falling copper prices amid the global economic downturn, Sterlite last year revised the bid downwards to $2.1 billion, which was later revised to $1.7 billion.
Sterlite is looking to acquire Asarco's three open-pit copper mines and associated mills and SX-EW in Arizona; a copper smelter in Arizona; a copper refinery, rod and cake plants; and a precious metals plant in Texas.
Asarco, formerly known as American Smelting and Refining Company, is a 110-year-old firm, which sold 2.37 lakh tonnes of refined copper last year. The company's mines currently have an estimated copper reserves of 5 million tonnes.
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