re: canadas teck cominco eyeing up australian mine zinifex is on the list
Teck's shopping list, if Inco fails
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Jamie Freed in Kalgoorlie
August 9, 2006
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CANADIAN base metals miner Teck Cominco has a list of 13 prime takeover targets - some of which are in Australia - and would consider launching a bid for one if it loses its $US17.4 billion ($22.9 billion) hostile bid for Canadian nickel giant Inco.
"We will be looking at a range of opportunities, and there are opportunities here [in Australia]," Teck chief executive Don Lindsay said after a presentation at the Diggers and Dealers mining conference in Kalgoorlie yesterday. "But at the moment there is nothing we would move on quickly."
On Monday night, Inco's board reiterated its rejection of the increased offer Teck made late last month in favour of a friendly merger with US copper miner Phelps Dodge. But this time around, Inco said it was open for discussions with Teck because the amended offer could "reasonably be expected to result in a 'superior proposal' " to the merger with Phelps Dodge.
Mr Lindsay said he received the statement from Inco's board while having drinks at Kalgoorlie's Palace Hotel and had yet to begin discussions with its executives.
In any case, Mr Lindsay noted Teck's offer was set to expire on August 16. "They didn't leave much time for discussions," he said.
Teck's cash and scrip bid for Inco has a larger cash component than the Phelps bid, but many market commentators believe Phelps will raise its offer.
Mr Lindsay said Teck was unlikely to increase its offer, saying "if the numbers don't add up with Inco, we will walk away".
He said a Teck-Inco combination would be more compelling than a Teck-Phelps tie-up because it would form a truly diversified North American mining giant to rival the likes of BHP Billiton, Rio Tinto, Anglo American and Xstrata.
Teck is the world's biggest zinc producer and also produces significant amounts of metallurgical coal, copper and gold. It has also invested in Canada's oil sands sector. A merger with Inco would give it the world's second largest nickel business. In contrast, Phelps is focused solely on copper and molybdenum.
There are rumours circulating in Kalgoorlie that if Teck loses its bid for Inco, it might consider a tilt at Zinifex or Oxiana. Mr Lindsay noted Teck would not necessarily look for a nickel acquisition if it lost Inco. He said it would be good to have an iron ore business to complement its metallurgical coal division.
Despite the developments with Inco, Mr Lindsay said he would remain in Australia until Friday.
"There's not a single person right now in New York or London or Toronto or Vancouver that thinks this is the place I should be," Mr Lindsay said. "But we made a commitment. In the mining industry, your word is your bond."
He is scheduled to give a speech at the Melbourne Mining Club tomorrow. Meanwhile, many mining executives in Kalgoorlie are keen to have a chat with him.
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