Sterlite ups bid for Asarco by $170 million
16 Jun 2009
Sterlite Industries has increased its offer price for bankrupt US copper miner Asarco LLC by about $170 million. Attempting to counter rival bidder Grupo Mexico's revised bid, Sterlite – a part of the London-listed Vedanta Resources Plc – is expected to increase the debt portion of its bid from $600 million to $770 million, according to various media reports.
Although the company has declined to comment officially, it is learnt that Asarco told the US bankruptcy court yesterday about the revised offer.
In March, Sterlite had offered to pay $1.1 billion in cash and $600 million in promissory notes for the Tucson-based company, which has been bankrupted by asbestos-related lawsuits. (See: Asarco seeks to settle lawsuits ahead of Sterlite takeover)
Vedanta, controlled by Indian expatriate Anil Agarwal, is fighting a three-way bid battle with Asarco's former promoter Grupo Mexico and hedge fund Harbinger Capital for control of the company. It has already agreed to pay more to the creditors claiming damages on environmental grounds.
The development comes days after Grupo increased its bid to $2.9 billion, including $1.3 billion in cash. Last month, Harbinger Capital, one of Asarco's largest bond holders, joined the fight with a $500-million reorganisation bid. Asarco owns three viable copper mines in Arizona.
Mexico's largest miner Grupo lost control of Asarco when the latter filed for bankruptcy in 2005 amid more than $1 billion of claims for causing harm to the environment.
Asbestos creditors had been favouring Grupo over Sterlite as they were convinced that they would benefit more if the Mexican company regained control. However, a bankruptcy court in Texas last week allowed Asarco to settle environment claims worth $1.1 billion from state agencies. It took much of the steam out of Grupo's bid.
