UPDATE 2-Asarco buy seen a bargain for India’s Sterlite
June 2nd, 2008 | by admin |(Updates with detail on court hearing)
By Devidutta Tripathy
NEW DELHI, June 2 (Reuters) - India’s Sterlite Industries(STRL.BO: Quote, Profile, Research) looks to have won the assets of bankrupt copper minerAsarco cheaply, analysts said on Monday, adding they did notsee much risk in a challenge to the deal from the owners.
Sterlite (SLT.N: Quote, Profile, Research), a unit of London-listed Vedanta Resources(VED.L: Quote, Profile, Research), said on Saturday it would buy the operating assets ofAsarco in an all-cash $2.6 billion deal, India’s largestoutbound M&A deal so far in 2008. [ID:nBOM280853]
Mexico’s top copper miner Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research), whichowns Asarco but does not have board control of its subsidiarybecause of the bankruptcy, said it would do absolutelyeverything in its power to block the sale. [ID:nN31443312]
“The chances for Sterlite are pretty high,” said RakeshArora, an analyst with Macquarie Research, noting GrupoMexico’s lack of legal success contesting the sales process.
“This being a Chapter 11 bankruptcy case, much of the sayis with the debtors,” he said.
The U.S. Bankruptcy Court in Corpus Christi, Texas, isscheduled to have a hearing on the sale on June 12 and 13,according to court documents.
Asarco, which owns three copper mines in Arizona, filed forbankruptcy protection in 2005 after it was sued for $1 billionover environmental clean-up and asbestos claims. It is sellingoff its assets to emerge from bankruptcy against the wishes ofits parent.
