Phelps Dodge Corp. may not be acquiring Asarco Inc. after all. Grupo Mexico is in with a higher bid.
Asarco agreed late Tuesday to be acquired by Phelps Dodge for about $1.1 billion in cash and stock, rejecting an earlier bid from Grupo Mexico.
Phelps Dodge already had struck a deal to buy Cyprus Amax Minerals Co. for $1.8 billion, making the three-way deal worth $2.9 billion.
On Thursday, however, Grupo Mexico, which has a 10 percent stake in New York-based Asarco just as Asarco does in the Mexican producer, offered $29.50 per share in cash, or $1.17 billion, for Asarco.
The dollar figure is the same as the cash-option component in the Phelps Dodge bid, but since Phelps Dodge's deal consists of 50 percent cash and 50 percent stock, Grupo Mexico's offer is about 3 percent higher.
The Phelps Dodge bid values Asarco at $28.43 a share based on Phelps Dodge's closing price Thursday of $54.43 3/4, up $1.43 3/4, on the New York Stock Exchange. Shares of Asarco closed up $1.75 at $30.75, also on the Big Board.
''Our revised offer presents a compelling opportunity for Asarco and its shareholders to improve upon your existing transaction with Phelps Dodge,'' Grupo Mexico officials said in a letter to members of the Asarco board. Dodge a $30 million terminal fee.
Clay Allen, a Phelps Dodge spokesman, said his company was unable to comment on the Grupo Mexico offer.
The copper industry, which has recently been plagued by rock bottom prices, has announced numerous layoffs and the closure of several operations this year. The summer was marked by a series of merger deals and offers as the industry seeks to consolidate.
Phelps Dodge officials have said the three-way merger with Asarco and Englewood, Colo.-based Cyprus Amax would save $200 million a year.
Meanwhile, in Australia, the home of Melbourne-based Broken Hill Proprietary Co. Ltd., that recently closed its cooper operations in Arizona and Nevada, the Sydney Morning Herald said a U.S. analyst expects Phelps Dodge to try to buy the BHP smelter in San Manuel.
Analysts figure that smelter, one of the largest in the world, is worth up to $330 million. It's considered to be modern and efficient, but BHP closed it in June in the face of company losses and the industry slump during which prices had dropped to about 61 cents a pound.
That shutdown, coupled with some others, helped reduce an oversupply and turn prices upward to their current level of about 80 cents a pound.