Phelps Dodge Boosts Bid for Merger With Asarco, Cyprus

NEW YORK — Phelps Dodge Corp. Wednesday raised its hostile bid for merging rivals Asarco Inc. and Cyprus Amax Minerals Co. to $2.83 billion in cash and stock, up from a previous all-stock offer of $2.63 billion.

The development brought a new twist to the month-old takeover battle, coming just eight days before shareholders of Cyprus and Asarco are scheduled to vote on their planned $1.5-billion merger that was announced in July.

Wall Street experts said the new Phelps bid has a good chance of killing the proposed Asarco-Cyprus deal and pressuring the two targets to the bargaining table.

Shares of all three companies rose sharply amid broader market declines. Although a buyer’s stock often falls when it raises its offer, Phelps Dodge stock rose because the company now expects to issue fewer new shares in the transaction, traders said.

Asarco and Cyprus had rejected the previous offers, contending they were inadequate. They also have said that their own two-way transaction offered more value to shareholders than the proposed three-way deal.

Shares of Phelps Dodge rose $1.50 to close at $58.69. Asarco gained $2.06 to close at $22.50 and Cyprus rose $1.56 to close at $18.81, all on the New York Stock Exchange.