Suitor drops bid for mining firm Rio Algom

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Wednesday, Oct. 4, 2000 | 11:13 a.m.

THE ASSOCIATED PRESS

TORONTO -- Mining concern Noranda Inc. said Tuesday it decided to scrap plans to try to acquire Canadian copper miner Rio Algom Ltd., allowing a rival bid from Britain's Billiton PLC to proceed.

Billiton, one of the world's largest aluminum producers, announced an agreement Aug. 25 to buy Toronto-based Rio Algom for $1.13 billion, or $17.88 a share, in cash. That offer topped an existing $993.6 million offer from Noranda, made earlier that week.

After Billiton's announcement, however, Noranda, also based in Toronto, said it would review Billiton's offer. Last month, Noranda, one of the world's largest producers of zinc and nickel, indicated it was preparing to up its offer for Rio Algom, provided Rio Algom opened its books to Noranda.

Noranda said Tuesday that, after reviewing Noranda's books, it decided not to make a new offer.

As a result of tendering shares to Billiton, Noranda said it expects to receive proceeds of $96.7 million and see a gain of about $31.6 million, before taxes. Noranda said it may use proceeds to buy back shares. The company also said it will continue to evaluate other opportunities.