The Ontario Securities Commission has temporarily blocked Noranda Inc’s (TSE) move to increase control of Falconbridge Ltd. (TSE). Citing pre-bid integration rules, the Commission has stopped Noranda’s $156 million bid for an additional seven million shares of Falconbridge. If successful, the $22.25-per-share offer by Noranda would have boosted that company’s interest in Falconbridge to 29.9%. Following the cancellation of Falconbridge shares purchased from Placer Dome earlier in the year, Noranda’s interest would have swelled to 33.4%.
The OSC investigation was initiated at the request of William James, Falconbridge’s chairman. James argued that the OSC should rule if Noranda could make an offer for 10% of his company at $22.25 per share, a price which lower than the highest price paid for block purchases completed by Noranda last summer.
James was pleased to hear that the OSC ruled in his favor, saying that the terms offered Falconbridge shareholders have to be as good as the best offer made to the block sellers during the past 90 days. During that period, Noranda purchased Falconbridge blocks for up to $23 per share.
As a result, Noranda must wait 90 days before resuming its bid to increase control of Falconbridge.
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