Asarco Urges Rejection of 2 Takeover Bids

Asarco Inc.’s board unanimously recommended that shareholders reject competing takeover offers from Phelps Dodge Corp. and Grupo Mexico, challenging suitors for the copper producer to raise their bids. Asarco’s directors authorized management to begin seeking better offers. The offer from Phelps, the largest U.S. copper company, is valued at $1.98 billion in cash, stock and assumed debt based on its closing price of $54.38 on Monday. Grupo Mexico, that country’s No. 1 copper producer, has offered $2.05 billion in cash and debt. Phoenix-based Phelps has been pursuing Asarco since late August, when it first offered to buy the New York-based company and Englewood, Colo.-based Cyprus Amax Minerals Co. for $2.39 billion in stock. Cyprus accepted a $1.8-billion bid from Phelps on Thursday. Although it’s playing hard to get, Asarco is unlikely to remain without a merger partner, said J. Clarence Morrison, a Prudential Securities analyst who rates Asarco shares “hold.” Morrison expects both Phelps and Grupo Mexico to raise their offers at least once. Asarco shares fell 13 cents to close at $26.75 and Phelps Dodge fell 81 cents to $53.56, both on the New York Stock Exchange.