Mumbai: Nonferrous metals and mining firm Sterlite Industries (India) Ltd, locked in a bidding war for more than a year with Grupo Mexico SAB for bankrupt Asarco Llc, topped its rival’s offer for the US copper miner by almost 3%.
The offer was increased to $2.57 billion (Rs12,465 crore) in cash from $2.14 billion, Mumbai-based Sterlite, said in a statement to the National Stock Exchange.
Planning ahead: Vedanta Resources chairman Anil Agarwal. Indranil Bhoumik / Mint.
Grupo Mexico, which was trying to win back its copper unit, had offered $2.5 billion last month. Sterlite and Grupo Mexico want to buy Asarco to gain control of the company’s copper mines in Arizona.
Prices of the metal doubled this year on rising Chinese demand and optimism the US economy will recover.
Copper for three-month delivery rose as much as 1.5% to $6,390 and traded at $6,370.25 a tonne at 6am in London.
Sterlite and its UK-based parent Vedanta Resources Plc are among miners that benefited from the rally.
“Vedanta wants to invest $20 billion to increase metal and power production and buy Asarco, for which it first bid in May 2008,” founder Anil Agarwal said in July.
Sterlite shares fell as much as 4.8% to Rs729.20 and ended at Rs746.20 on NSE on Friday. Grupo Mexico closed Mexico City trading at 23.08 pesos, up 0.3%. Sterlite’s American depository receipts rose 1.9% to $15.70 at close of trade on Thursday in New York.
Grupo Mexico secured court recommendation on 31 August to be allowed to regain control of Asarco.
US bankruptcy judge Richard Schmidt sent his recommendation to a district court judge who will make the final decision on Asarco, at least five years after the company filed for bankruptcy.
US district judge Andrew Hanen said in court he plans to make his decision by the end of November.
Schmidt, in Corpus Christi, Texas, compared competing plans from Grupo Mexico and Sterlite that each promised to fully repay creditors who claim to be owed $3.62 billion. Grupo Mexico’s plan was the better of the two, Hanen said.
Asarco, the third largest producer in the US, owns mines that hold around five million tonnes of copper resources. It produced 237,000 tonnes of copper last year.