Three-Way Copper Merger Proposed

U.S. copper producers Asarco Inc. and Cyprus Amax Minerals Co. on Wednesday offered Phelps Dodge Corp. a reverse bear hug, saying they would be prepared to negotiate a three-way merger if Phelps Dodge were prepared to raise its bid for the two companies.

“We have presented very simple terms to Phelps Dodge which we believe recognize the contribution our two companies make to a three-way combination,” Asarco and Cyprus Amax said in a joint news release.

Asarco and Cyprus Amax also improved the terms of their own planned $1.5 billion merger, saying they would pay shareholders an additional $650 million, or $5 a share, after their deal was complete. They did not specify if the payment would be cash or stock.

On Aug 20., Phelps Dodge offered $2.66 billion in stock to acquire both Englewood, Colorado-based Cypress Amax and New York-based Asarco. Asarco and Cyprus Amax said Wednesday, however, that they would consider being bought by Phoenix-based Phelps Dodge, now the top U.S. copper producer, if it paid 0.53 share for each Asarco share and 0.4055 share for each Cyprus Amax share.