TORONTO — Canadian nickel miner Inco Ltd. said Friday that it was dropping out of a bidding war for rival Falconbridge Ltd., opening the door for Anglo-Swiss mining company Xstrata to move ahead with a hostile takeover of Falconbridge.
Inco said its $17.3-billion bid for Falconbridge had failed because not enough shares were tendered by midnight Thursday, and it had instructed depositary CIBC Mellon Trust Co. to return all shares that had been tendered.
"Though a large number of Falconbridge shareholders supported our offer, unfortunately it wasn't enough," Inco Chief Executive Scott Hand said.
Toronto-based Inco's U.S.-traded shares rose $2.50, or 3.4%, to $76.40. U.S.-traded shares of Falconbridge, also based in Toronto, rose 36 cents to $55.02.
Falconbridge said its board would meet to review the latest developments and Canadian regulators' approval of a takeover by Xstrata. Falconbridge also said it would provide its shareholders with a formal recommendation at a later date.
Xstrata, which already owns about 20% of Falconbridge, last week raised its bid to acquire the remaining 80% of Falconbridge to $16.9 billion in cash.
That offer values all of Falconbridge at $21.2 billion.