Phelps Dodge to Raise Offer for Asarco

Phelps Dodge Corp., the biggest U.S. copper producer, told Asarco Inc. that it’s ready to raise its $996.6-million bid for the company after a Mexican rival on Friday made a higher offer. Phelps Chief Executive Douglas Yearley sent a letter Monday to his Asarco counterpart, Francis McAllister, suggesting that they meet to discuss a revised Phelps proposal. A new Phelps offer would be “superior to those you are now considering,” the letter said. Phelps filed the letter with the Securities and Exchange Commission after the close of trading. New York-based Asarco told Phelps officials that it is willing to hold discussions, a person familiar with the situation said. Phelps twice raised its bid for Asarco and copper producer Cyprus Amax Minerals Co., which announced in July their own plan to merge. Phelps’ latest cash-and-stock offer for Asarco is valued at $25.04 a share, 3.7% less than Grupo Mexico’s $26-a-share cash bid. The Mexican company isn’t pursuing Cyprus. A spokesman for Phoenix-based Phelps declined to elaborate, and officials at Asarco and Grupo Mexico, which holds a 10% stake in Asarco, would not comment. Cyprus, Asarco and Phelps have all canceled analyst and investor meetings scheduled for this week as they plan their next move, the companies said. On the New York Stock Exchange, Phelps closed down 94 cents at $55.69, while Asarco rose 6 cents to close at $27, and Englewood, Colo.-based Cyprus Amax fell 44 cents to close at $19.13.