Sterlite Ind raised bid for Asarco to $ 2.2 Bn

The race for Asarco has started to heat up. Sterlite Industries raised its bid for Asarco to $ 2.2 billion, this at a time when just a few days ago Sterlite chief Anil Agarwal came on record and said the company would not be going forward into any kind of bidding war. Grupo Mexico’s bid for Asarco also stands at $ 2.2 billion.

Archi Damania of CNBC-TV18: ” The bid now from Sterlite is moving close to what it was last year at about $ 2.6 billion. In May 2008, the original bid stood at $ 2.6 billion and at that time, copper prices were at $ 7,000 per tonne. After that in March 2009, the company revised the bid downwards to $ 1.1 billion in cash plus $ 770 million in terms of staggered payments and at that time copper prices were has slipped to $ 4,000 per tonne, so the bid was also adjusted downwards.

Last week, again Sterlite had raised the bid and increased the cash component to $ 1.58 billion. Copper prices now are at $ 6,000 per tonne and now within 10 days there’s been a hike in the bid. The question now is: at this price is the deal EPS-accretive? The answer would be yes as copper prices have moved upwards, cost of production for Asarco’s mining asset is at about $ 4,000 per tonne”.

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