Cyprus Amax, Asarco look at alternatives to merger

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— The boards of Cyprus Amax Minerals and Asarco Inc. have authorized managers to explore alternatives to their planned merger, both companies said.

The announcements Monday follow moves last week by two other suitors of the copper rivals.

Phoenix-based Phelps Dodge on Wednesday upped its bid for Cyprus Amax and Asarco by $1 billion in cash.

On Friday, Mexican copper mining giant Grupo Mexico SA said it would offer to buy all of Asarco's common shares it doesn't already own for $26 a share topping Phelps Dodge's bid for New York-based Asarco by about $27.4 million, or 69 cents a share based on closing stock prices Monday. Grupo Mexico and Asarco already hold 10 percent interests in each other.

Englewood-based Cyprus and Asarco have rebuffed two previous stock-only offers from Phelps Dodge. Asarco has not commented specifically on the Grupo Mexico bid.

Cyprus and Asarco shareholders were scheduled to vote on their merger Thursday.

But Cyprus officials said in a written statement Monday the company will consider its alternatives, including the proposal from Phelps Dodge. They declined to elaborate on the discussions. Senior Vice President Gerald Malys didn't return phone calls.

Asarco, in a statement said managers were authorized ''to explore all available strategic alternatives that could maximize shareholder value.'' Those options include merging with Cyprus or another company, a sale of some assets, acquisitions or a change in its capitalization or dividend policy, the company said.

Eduardo Gonzalez, deputy director for investor relations at Grupo Mexico in Mexico City, said Monday that acquisition of Asarco would give his firm increased reserves and geographical diversity by expanding its copper production from just northern Sonora to Arizona, Peru and Canada.

''Although bigger is not necessarily better, in this case it is,'' Gonzalez said.

The U.S. Justice Department antitrust division last week signed off on Phelps Dodge Corp.'s proposal to acquire the other two companies. The deal would merge three of the country's four largest copper companies.

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