Asarco takeover tussle...Sterlite hikes bid yet again

Sterlite Industries India Ltd., a subsidiary of Vedanta Resources Plc, announced that it is raising its offer price for the purchase of substantially all of the operating assets of Asarco LLC, by approximately US$500mn. Sterlite also said that it has proposed to support a plan of reorganisation that is intended to pay creditors in full their allowed amount of claims and full post petition interest. With this improvement, the revised total consideration will increase to cash at closing of approximately US$2.1bn. While there is an increase in the cash consideration, Sterlite said it will receive an about 72.5% interest in the Litigation Trust to be set up by the Debtor in Possession (Asarco) at closing of the transaction to pursue a judgement against Americas Mining Corp. awarded by the US District Court of Texas, Brownsville Division.

Sterlite hiked its bid to about US$2.1bn in cash and a US$207.9mn copper price participation note, the company said in a statement. The move follows an announcement by Grupo Mexico SAB on Monday that it would raise its offer to buy Asarco out of bankruptcy to US$2.2bn in cash plus a US$280mn note, an increase of about US$500mn over its previous offer. Sterlite's previous offer was for US$1.58bn in cash plus a US$200mn note with a present value of US$83mn. The deal is backed by key creditor groups and Asarco's union. The Vedanta unit in 2008 had offered US$2.6bn for Asarco but shelved it as copper prices collapsed. In March this year, it returned with a US$1.7bn proposal.