Sterlite Industries India Ltd. (SLT) update #6
Posted by intelledgement on Wed, 18 Jun 08
Grupo Mexico (GMBXF) brought up the heavy artillery in their duel with our Sterlite Industries (SLT) over the copper assets of bankrupt Asarco on Friday, offering up to $500MM more for a total of $3.1B. The funds—along with another $1B of cash in Asarco’s possession—would be earmarked to settle more than $5B of environmental and asbestos lawsuit claims against Asarco. GMBXF reportedly would also drop their longstanding lawsuit against Asarco.
Back in May, SLT’s bid of $2.6B had been declared the winner over several competing lesser bids (including one from GMBXF) in a multi-month, bankruptcy court-approved process. Sterlite are reportedly mulling legal action should the Asarco board of directors decide to trash that result in favor of Grupo Mexico’s new bid, but clearly they have a fiduciary duty to consider a better offer should one be forthcoming.
If the GMBXF offer is as good as it looks, Sterlite may have to either up the ante or settle for the thanks of the Asarco creditors, who should certainly be grateful to SLT for getting Grupo Mexico to make a serious offer after years of delay.