Cobre advised to reject Phelps Dodge

Financial advisors to Cobre Mining have recommended that the takeover bid by Phelps Dodge (PD-N) be rejected.

A special committee of Cobre board members has rejected the bid on the financial advice of Yorkton Securities. The offer, says Cobre director Bill Blundell, is inadequate, opportunistic, coercive and not in the best interests of the company.

Blundell is chairman of the special committee, which excludes Chief Executive Officer Jeffrey Ward and President Richard McNeely, who excluded themselves from the committee because they own a significant percentage of the company.

Phelps Dodge has offered to purchase all of the outstanding shares of Cobre at a price of US$3.85 per share and purchase all Series A and Series B warrants at a price of US10cents per warrant. The total value of the offer is US$105 million.

In the meantime, Cobre waits for other suitors to step in and challenge the Phelps Dodge bid, which expires Feb. 3.

Cobre operates the Continental copper mine, near Phelps Dodge’s Chino copper mine, in New Mexico.