Aug 1 2006
Teck Cominco Limited today announced that it has revised its cash and share offer to acquire all the outstanding shares of Inco Limited (TSX, NYSE – N). Under the revised offer, Inco shareholders will receive, subject to proration, C$82.50 per Inco share in cash, or 1.1293 Teck Cominco Class B subordinate voting shares plus C$0.05 per Inco share. The revised offer represents C$40.00 in cash and 0.5821 of a Teck Cominco Class B subordinate voting share per Inco share at full proration. The expiry time for the revised Teck Cominco offer is Wednesday August 16, 2006 at midnight (Toronto time).
Don Lindsay, Teck Cominco’s President and Chief Executive Officer, said: “We believe that our revised offer will be very attractive to Inco shareholders. It is also consistent with our stated policy that we will take a disciplined approach to this transaction. The increased cash component crystallizes substantial value for Inco shareholders who choose that option. The lower number of Teck Cominco shares offered preserves more value for shareholders who participate in the great potential of the combined company, including existing Teck Cominco shareholders. Inco shareholders have a choice between the certainty and value of our offer and the highly conditional offer by Phelps Dodge which will not close until September, at the earliest, if at all. We have all regulatory approvals we require to complete our offer on August 16. Inco shareholders should tender their shares to our offer as soon as possible.”
Teck Cominco will pay up to a maximum of C$9.1 billion in cash and will issue up to 132.3 million Teck Cominco Class B subordinate voting shares pursuant to the revised offer. This represents an increase in the cash component of the offer of C$2.7 billion or 43%, and a decrease of 10.7 million shares or 7.5% in comparison to Teck Cominco’s original offer. Teck Cominco will fund the cash portion of the offer out of its C$3.6 billion of cash on hand and a committed term loan facility.
All other terms of the Teck Cominco offer are unchanged. Teck Cominco’s offer was conditional on Inco’s announced takeover bid for Falconbridge having been withdrawn or terminated and on the Inco/Falconbridge support agreement having been terminated in accordance with its terms. On July 28, 2006, Falconbridge announced that the support agreement had been terminated as a result of the July 27, 2006 expiry of the Inco offer, fulfilling this condition of our offer.
Teck Cominco expects to mail a formal notice of variation to all Inco shareholders on or before August 3, 2006.