Rio Algom Takeover Bid

Metals giant Noranda Inc., announced on September 8, 2000 that it had submitted a revised takeover offer for Toronto-based Rio Algom Limited, as part of a hostile bid it is engaged in with British-based mining company Billiton Plc. Noranda’s new proposal contemplates a takeover bid of at least $1.73 billion in cash, however it is dependent on adequate due diligence findings. The new offer is in response to an August 25, 2000 competing bid by Billiton valued at approximately $1.7 billion, which had received support from the board of Rio Algom.

If successful, Noranda’s bid will see the company’s annual copper production doubled, and will also give the company a number of world-class mining assets, including a controlling interest in Peru’s massive Antamina copper/zinc project that will provide the copper concentrate necessary to feed the company’s metallurgical complexes. Noranda announced at the time of its original bid on August 22, 2000 that if the bid is successful, it would sell as much as 50 per cent of the assets of Rio Algom to Chile’s state-owned mining company, Codelco, the world’s largest copper producer. Under the arrangement, the two companies would jointly administer the assets. Under the proposed bid, Noranda will also assume approximately $1.1 billion of Rio Algom’s debt, valuing the deal at approximately $2.83 billion.

McCarthy Tétrault is representing Noranda with a team comprised of Garth M. Girvan, Graham P.C. Gow, Jonathan Grant (corporate), Gabrielle M. Richards (tax) and Glen G. MacArthur (competition). Codelco is represented in Canada by Stikeman Elliott with a team comprised of William J. Braithwaite, Dee Rajpal, Donald Belovich, Lianne Miller and Paul Collins. US Counsel to Codelco is Cleary, Gottlieb with a team led by Jeff Lewis and Dan Sternberg. Billiton is being represented by David Jackson, Sheila Murray, John Kolada, Mario Josipovic, Leslie Morgan and Chris Van Loan of Blake, Cassels and Graydon LLP. Rio Algom is represented by Osler, Hoskin Harcourt LLP with a team led by John Kazanjian with Ward Sellers, Christopher Murray, Robert Yalden, Mark Gelowitz, Iain Scott, Marc Valencia and Greg Firnau and by Sullivan & Cromwell in New York with James Morphy, Steve Kotran, Audra Cohen and Elizabeth Nowicki.