ZUG, Switzerland (CP) -- Xstrata PLC shareholders [LSE:XTA] have voted overwhelmingly to approve the firm's C$18-billion takeover bid for Canada's Falconbridge [NYSE:FAL; TSX:FAL] Ltd.
Swiss-based Xstrata is set to seize control of Falconbridge and its stable of global base-mineral operations Monday night when the takeover offer expires, with Falconbridge shareholders receiving payment by Aug. 17.
Two weeks ago, Falconbridge's board of directors recommended that shareholders tender to the takeover bid by Xstrata, signalling an end to a months-long takeover battle among Canada's mining giants.
Xstrata, which already owns 24.5% of Falconbridge, is offering C$63.25 a share in cash, including a special dividend, for the rest. Its own shareholders voted 99.85% in favour of the sweetened bid.
Falconbridge had initially spurned Xstrata's offer, forming an alliance with fellow Canadian mining company Inco Ltd. [NYSE:N; TSX:N] and U.S. copper miner Phelps Dodge Corp. [NYSE:PD] with plans to create the country's biggest nickel company. However, those plans dissolved after shareholders failed to support the merger.
Inco is now a takeover target itself, with Phelps Dodge, Vancouver miner Teck Cominco Ltd. [NYSE:TCK; TSX:TCK.B] and Brazil's Companhia Vale do Rio Doce [NYSE:RIO], or CVRD, all bidding for the nickel giant.
Inco, seeking to save its deal with Falconbridge, agreed in June to be acquired by U.S. copper miner Phelps Dodge Corp. But with Xstrata's offer on the table, the Inco-Falconbridge deal unraveled as a majority of Falconbridge shareholders failed to tender their shares to Inco by the late July deadline.
Then, last week, a third bidder emerged for Inco as CVRD, the world's largest iron ore miner, announced what it called a superior proposal to those from Phelps Dodge and Teck Cominco.
When the Xstrata deal closes, the company that drew its name from a Falconbridge Township nickel discovery near Sudbury, Ont., will be little more than a memory.
People familiar with the strategy told the Globe and Mail that Xstrata plans to realign its international nickel assets with Falconbridge's Ontario, Quebec and New Caledonia operations under the umbrella of a slimmed-down Toronto head office called Xstrata Nickel.
Xstrata has promised to preserve for three years Falconbridge's Canadian nickel, copper and zinc mining, exploration, research and processing operations.
In other base metals merger news, Phelps Dodge Corp. shareholders will get a chance to vote on the proposed C$17.7-billion takeover of Inco Ltd. on Sept. 25.
The meeting date eases some of the uncertainty around the U.S. copper firm's bid, which is facing competition from other suitors and some shareholder dissent.
Inco's board has consistently backed the Phelps bid, which began as a friendly three-way merger that included Falconbridge Ltd., although that miner is poised to be acquired by Switzerland's Xstrata PLC, a major global coal producer and miner.
At least one major Phelps stockholder, Atticus Capital, has said it will vote against the Phelps-Inco combination because of the amount of debt the firm will incur in the transaction. The voter eligibility of Phelps shareholders will be determined by Aug. 24.
Also on Monday, leaders of the United Steelworkers, which represent workers at both Inco and Falconbridge, said they want to open a dialogue with CVRD to develop relationships like those it has with Inco, Phelps Dodge and Teck Cominco.
''We look forward to having an open dialogue with CVRD to ensure there is a clear understanding of the union's position with respect to whoever or whatever ends up owning Inco,'' said national director Ken Neumann.
''Beyond that, we expect the government of Canada to exercise its responsibility to Canadians and examine every potential purchaser of our resources, and to do what is best for Canada.''
The union had been strongly opposed to Xstrata's acquisition of Falconbridge and had favoured Teck as a backup suitor for Inco after the Inco-Phelps-Falconbridge combination failed.
On the New York Stock Exchange Monday, Phelps shares fell 98 cents to close at US$89.34, while Inco stock on the Toronto market fell 28 cents to close at C$88.80 - well above the CVRD bid price.
On the Toronto Stock Exchange on Monday, Falconbridge shares rose one cent to close at C$62.37.
(c) The Canadian Press 2006
