VANCOUVER, Canada — Teck Cominco Ltd. said Monday that it would pay 17.8 billion Canadian dollars ($16 billion) for Inco Ltd. on the condition that the mining company drop its bid for rival Falconbridge Ltd.
Teck said it would have market-leading positions in zinc, nickel and metallurgical coal and a significant presence in copper, gold and other commodities if it were to acquire Toronto-based nickel mine operator Inco.
Inco said that it would review the offer but that it remained committed to its deal for Falconbridge.
Teck's offer for Inco amounts to 78.50 Canadian dollars ($71.04) a share in cash or shares and is "a better deal" for Inco shareholders than the Falconbridge bid, Teck CEO Donald Lindsay said.
"It's a better deal because the new company will have greater diversification and more leading commodity positions and this will ultimately reduce the volatility of earnings and cash flow," Lindsay said.
In a statement, Inco said its board "will review the formal offer from Teck Cominco when it is made available."
But it noted that Teck had attached "a number of conditions" to its bid.
Inco's shares shot up about 14.5%, Teck Cominco shares dropped 4.5% and Falconbridge stock rose 6.8% in Toronto trading.