I posted a couple of weeks ago about the deals swirling around the mining industry. As expected, Falconbridge was snatched away from Inco last week by Xstrata, undoing a planned three-way tie-up between Inco, Falconbridge and Phelps Dodge.
Phelps plans to proceed with its friendly acquisition of Inco, but Teck Cominco is trying to crash the party, raising its hostile bid for Inco. Two interesting aspects of this that seem to point to overheating in mining assets: 1) Phelps stock popped up on news that Falconbridge was lost, and shares are up another 8% today on (among other things) hopes that Teck's sweetened offer will keep Phelps from buying Inco; and 2) Teck has improved its offer by upping the cash component. Yes, the latter provides greater certainty that the seller will receive value, but it also suggests that there has been a lot of discussion in these negotiations about how much room there really is for Teck shares to grow after making this acquisition.
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