Phelps Dodge Statement on Revised Xstrata Offer for Falconbridge
July 11 2006 - 11:57AM
PR Newswire (US)
PHOENIX, July 11 /PRNewswire-FirstCall/ -- Phelps Dodge Corporation
(NYSE:PD) today issued the following statement regarding Xstrata
Plc's (LSE: XTA) revised offer for Falconbridge Limited (TSX, NYSE:
FAL): "We are not surprised by Xstrata's increased bid for
Falconbridge, given the attractiveness of the Falconbridge assets.
Based on the terms of our agreed combination with Inco, the implied
value of Inco's offer for Falconbridge is C$61.04 per share based
on yesterday's closing price of Phelps Dodge shares. The value of
the Inco offer is therefore currently superior to the Xstrata
offer, and we continue to believe the friendly three-way agreed
deal between Phelps Dodge, Inco and Falconbridge also will provide
the greatest long-term value for Falconbridge shareholders as well
as net benefits to Canada that would not be available under
Xstrata's hostile offer. Importantly, Falconbridge shareholders
will have the ability to participate in the upside resulting from
the three-way combination through their ownership of almost 30
percent of the combined company, which is not the case with
Xstrata's cash offer. This upside includes a 30 percent share in
the $900 million of expected synergies, which have a net present
value of $5.8 billion." Phelps Dodge is one of the world's leading
producers of copper and molybdenum and is the largest producer of
molybdenum-based chemicals and continuous-cast copper rod. The
company employs 13,500 people worldwide. Cautionary Language
Concerning Forward-Looking Statements These materials include
"forward-looking statements" (as defined in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934) including statements regarding, among other things,
the benefits of the combination with Inco and the combined
company's plans, objectives, expectations and intentions. All
statements other than historical information are forward-looking
statements. These forward-looking statements are based on
management's current beliefs and expectations, speak only as of the
date made, and are subject to a number of significant risks and
uncertainties that cannot be predicted or quantified and are beyond
our control. Future developments and actual results could differ
materially from those set forth in, contemplated by, or underlying
the forward-looking statements. The following factors, among
others, could cause actual results to differ from those described
in the forward-looking statements in this document: (i) the ability
to obtain governmental approvals of the combination on the proposed
terms and schedule; (ii) the failure of Inco's shareholders to
approve the plan of arrangement; (iii) the failure of Phelps
Dodge's shareholders to authorize the issuance of Phelps Dodge
common shares, the change of Phelps Dodge's name to Phelps Dodge
Inco Corporation and an increase in the size of Phelps Dodge's
board of directors as required under the combination agreement;
(iv) the risks that the businesses of Phelps Dodge and Inco and/or
Falconbridge will not be integrated successfully; (v) the risks
that the cost savings, growth prospects and any other synergies
from the combination may not be fully realized or may take longer
to realize than expected; (vi) the combined company's inability to
refinance indebtedness incurred in connection with the combination
on favorable terms or at all; (vii) the possibility that Phelps
Dodge will combine with Inco only; (viii) the possible impairment
of goodwill resulting from the combination and the resulting impact
on the combined company's assets and earnings; and (ix) additional
factors that may affect future results of the combined company set
forth in Phelps Dodge's, Inco's and Falconbridge's filings with the
Securities and Exchange Commission, which filings are available at
the SEC's Web Site at (http://www.sec.gov/). Except as required by
law, we are under no obligation, and expressly disclaim any
obligation, to update, alter or otherwise revise any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future events or otherwise. NOTE: In connection with the proposed
combination, Phelps Dodge has filed a preliminary proxy statement
on Schedule 14A with the SEC. Investors are urged to read the
definitive proxy statement (including all amendments and
supplements to it) when it is filed because it contains important
information. Investors may obtain free copies of the definitive
proxy statement, as well as other filings containing information
about Phelps Dodge, Inco and Falconbridge, without charge, at the
SEC's Web site (http://www.sec.gov/). Copies of Phelps Dodge's
filings may also be obtained without charge from Phelps Dodge at
Phelps Dodge's Web site (http://www.phelpsdodge.com/) or by
directing a request to Phelps Dodge, One North Central Avenue,
Phoenix, Arizona 85004-4414, and Attention: Assistant General
Counsel and Secretary (602) 366-8100. DATASOURCE: Phelps Dodge
Corporation CONTACT: Peter J. Faur, +1-602-366-7993, or Investors:
Stanton K. Rideout, +1-602-366-8589, both of Phelps Dodge
Corporation Web site: http://www.phelpsdodge.com/
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