By Nicole Mordant
Reuters
Tuesday, November 16, 2004
http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml? [1]
duid=mtfh20062_2004-11-16_20-37-38_n16318293_newsml
VANCOUVER, British Columbia -- Noranda Inc. said
on Tuesday it is reopening the field to other bidders
or may go it alone after failing to seal a
multibillion-dollar takeover by China Minmetals during
seven weeks of exclusive talks.
The big Canadian miner will continue to have
discussions with the state-owned Chinese trading
house but said that a period of exclusivity has expired
and won't be renewed, a move analysts said is aimed
at pressuring Minmetals into striking a deal quickly if
it is still keen.
"Noranda and (parent) Brascan have gotten sick and
tired of the Chinese dragging their feet. Apparently the
package presented to them by China Minmetals is
also not satisfactory," said a Toronto-based analyst
who asked not to be identified.
Noranda's stock gained 68 Canadian cents to C$21.18
and shares of Brascan, which owns 42 percent of
Noranda, rose C$1.18 to C$44, as the market hoped
for a richer deal.
David Weiner, Minmetals' spokesman in Canada, said
his company was "absolutely" still interested in Noranda,
which, as the world's third-biggest zinc and ninth-largest
copper miner, offers industrializing China a stable supply
of metals.
"It's a complex transaction and, by their nature, they take
time to execute," Weiner said, adding: "You can
certainly expect to hear from us in the very near future."
After putting itself up for sale in June at a time of buoyant
metal prices, Noranda picked Minmetals on Sept. 24 from
among several suitors as its top deal prospect.
Brazil's Companhia Vale do Rio Doce, the world's No. 1
iron ore producer, is widely regarded as one of the other
bidders and its president said on Tuesday that it was
open to talks about Noranda.
"If Brascan seeks us out, we are open to studying
anything. But we will move ahead only on projects that
create value for our shareholders," Roger Agnelli told
journalists at a news conference in Rio de Janeiro.
CVRD's stock was down 5 percent or $1.22 in New
York at $23.20.
In the weeks that Minmetals has been looking into
Noranda's operations, Noranda's stock has dropped
about 9 percent, while mining stocks on the Toronto
Stock Exchange have risen about 8 percent as metal
prices zoomed higher.
"It was not in the best interests of Noranda
shareholders to continue granting an exclusivity to
China Minmetals when the economic fundamentals in
the industry have continued to improve," said Noranda
spokesman Denis Couture, pointing to robust metal
prices and Noranda's good third-quarter results.
"Negotiations with Minmetals are progressing and are
cordial ... but we might want to pursue options with
other parties," he said.
Noranda said in September that the Chinese firm had
made a preliminary offer to buy all of Noranda in a
mostly cash deal.
Canaccord Capital analyst Greg Barnes said the small
premium that Minmetals offered, which lead the market
to peg a value of up to C$23 a share, or C$7 billion
($6.4 billion) on the transaction, put a lid on Noranda's
stock price.
"People are looking at it as dead money," he said.
Another rumored Noranda suitor, Switzerland's XStrata
Plc, could be off the radar screen after it recently made a
bid for Australia's WMC Resources, a copper and nickel
producer that CVRD is also seen eyeing.
Couture said Noranda was also weighing going it alone.
There is no deadline for a decision on its future, he said.
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