Sterlite likely to match Grupo Mexico’s bid to acquire Asarco - Quoted in the Financial Express

Mumbai: Sterlite Industries Ltd might match the natural resources giant Grupo Mexico’s counter offer of $1.3 billion in cash to acquire copper miner Asarco, as Grupo Mexico seems to be just not accepting defeat and is continuously expressing its interest in Asarco, say experts.
“It will not be difficult for Sterlite to match Grupo Mexico’s offer in an all cash deal, and Sterlite should go ahead with it,” said a Mumbai-based analyst.

Copper prices have increased by almost 25% from the time Sterlite made its bid for Asarco earlier. Moreover, it would not make sense to increase the bid because then there is a possibility that the bid would keep continuing.

Says Dipesh Dipu, principal consultant – Mining, PwC, “The decision to match or exceed the counteroffer may depend upon the bidding guidelines established by the bankruptcy court for sale of assets. An auction-like sale may necessitate a new bid to exceed the other bidder at least by the tick size.”

Shares of Sterlite Industries on Wednesday slipped 0.75% to close at Rs 421.90 on the BSE.
Meanwhile, on Tuesday international media reported that the US Bankruptcy Judge Richard Schmidt declined to rule on Asarco’s request to sign a sale contract with Sterlite at a hearing in Corpus Christi, Texas. Asarco LLC, must wait for a ruling on its proposed sale to Sterlite Industries (India) Ltd., the ruling said.

“This transaction may have strategic implications for Vedanta Group and may catapult them into the big league in copper, apart from providing them foothold in the US mining industry. The challenge in these times of economic slowdown and slide in copper price, however, may be not-to-blink-first. The process is expected to be long drawn and bidding within a defined but dynamic boundary of as the auction is played out may be the only option,” added Dipu.

(http://www.financialexpress.com/news/sterlite-likely-to-match-grupo-mexicos-bid-to-acquire-asarco/447371/)