Battle for Asarco evenly poised between Grupo and Sterlite - Quoted in the Financial Express

With market capitalisation of close to $12.1 billion and a total revenue of about $67.7 billion, Grupo Mexico can not be considered less strong a competition to Sterlite Industries, who is currently leading the fray to buy bankrupt US copper miner Asarco.
The year-long tussle between mining giant Grupo Mexico and Sterlite Industries, a subsidiary of London listed Vedanta Resources Plc, is at its final stage in the Texas court.
Experts believe, Grupo Mexico has bid at fairly competitive price, and, hence, the battle for Asarco seems evenly poised.
However, Grupo Mexico may have a disadvantage due to the litigation against it's acquisition of Peruvian mines of Asarco. Hence, the management of Asarco may favour Sterlite more than Grupo Mexico. Also, the group of creditors favours Sterlite.
Grupo had bought Asarco in 1999 for more than $2 billion and then established Americas Mining as Asarco's parent company. At the time of the acquisition, Asarco's "crown jewel" had a 54% stake in Southern Peru Copper Corp (SPCC), which operates two Peruvian copper mines. In March 2003, Grupo Mexico had Asarco transfer its 54% stake in SPCC to Americas Mining for $747 million.
Asarco's business then saw a quick decline and filed for Chapter 11 bankruptcy protection in 2005. In February 2007, Asarco filed an adversary lawsuit in the District Court on behalf of its creditors against Grupo and Americas Mining. Despite all this, the question that arises is what is making Grupo Mexico so aggressive for Asarco?
Dipesh Dipu, principal consultant, PwC said, "The AMC litigation itself has close to $7 billion claim, and if Grupo acquires Asarco it will not have to be paid. This chance of an amicable settlement of liability may have led to Grupo's aggression." On the other hand, Vedanta is positive of winning the bid. With cash in hand of about $6-7 billion, Vedanta is targeting to be among the top five metal producers in the world.
"The long drawn battle in bankruptcy court can be shortened through an auction like mechanism with a clearly defined mechanism to evaluate counterbids. Both Grupo and Sterlite may have to wait and watch each other's moves till the court decides conclusively," Dipu added.