Aug 16 2006
Inco Limited today announced its formal response to the offer commenced yesterday by Companhia Vale do Rio Doce (“CVRD”) to purchase for cash all of the outstanding common shares of Inco (the “CVRD Offer”).
Inco’s Board of Directors carefully reviewed and considered the CVRD Offer, in consultation with its financial and legal advisors and in the context of its legal obligations under its existing Combination Agreement with Phelps Dodge Corporation (“Phelps Dodge”). Subject to certain exceptions, the Combination Agreement between Inco and Phelps Dodge requires that Inco’s Board of Directors continue to recommend that Inco shareholders vote in favour of the arrangement between Inco and Phelps Dodge unless it determines that an acquisition proposal (in this case, the CVRD Offer) constitutes a “superior proposal” and certain other requirements are met. The Board did not make the determination that the CVRD Offer is a “superior proposal” for purposes of the Combination Agreement and accordingly continues to recommend that Inco shareholders vote in favour of the proposed combination between Inco and Phelps Dodge. However, the Board did determine, based on information then available and after consultation with its advisors, that the CVRD Offer could reasonably be expected to result in a ‘‘superior proposal’’ for purposes of the Combination Agreement. This determination allows Inco to engage in discussions and negotiations with CVRD pursuant to the terms of the Combination Agreement and, accordingly, the Board has authorized Inco’s senior management and its advisors to engage in such discussions and negotiations.
The CVRD Offer is open for acceptance until September 28, 2006 and is subject to a number of conditions. Accordingly, there is no necessity for Inco shareholders to take any action with respect to the CVRD Offer at this time. At this time, the Inco Board of Directors has determined to remain neutral and to make no recommendation to Inco shareholders in respect of the CVRD Offer.
In connection with the CVRD Offer, the Company is filing today a Directors’ Circular with Canadian securities regulatory authorities and a Solicitation/Recommendation Statement on Schedule 14D-9 (the “CVRD 14D-9”) with the United States Securities and Exchange Commission (the “SEC”). The Directors’ Circular will be mailed to Inco shareholders tomorrow. Inco shareholders are urged to read the Directors’ Circular and the CVRD 14D-9 and any amendments thereto because they contain important information. Investors can obtain a free copy of these documents and any amendments thereto on Inco’s corporate website.