Grupo Mexico Bests Phelps Bid for Asarco

Grupo Mexico offered $26 a share for Asarco Inc., adding a new twist in the battle to form the world’s largest copper producer. The bid from Mexico’s largest copper company tops a hostile offer by Phelps Dodge Corp., which is also trying to acquire Cyprus Amax Minerals Co. Phelps said earlier in the day that the Justice Department approved its $2.69-billion plan to buy Asarco and Cyprus, eliminating one of the firms’ grounds for rebuffing earlier offers. Asarco and Cyprus said their boards would consider the latest cash-and-stock bids by Phelps, which value Asarco at $24.71 a share and Cyprus at $18.91 a share. The two smaller companies are seeking shareholder approval of the merger deal they had reached before Phoenix-based Phelps made its offer. However, shareholders are overwhelmingly favoring rejecting management’s merger plans, people close to the situation said. Asarco and Cyprus are scheduled to tally votes Thursday. Grupo Mexico said it has obtained commitments from Chase Manhattan Corp. and Chase Securities Inc. to borrow as much as $1.073 billion to finance the offer, which values Asarco 10% above its closing price. News of the bid came after the markets closed. Shares of New York-based Asarco rose $1.38 to close at $23.56; Englewood, Colo.-based Cyprus rose 19 cents to $18.63; Phelps fell $1.94 to $54.56, all on the NYSE.