Inco Bid Hurts Teck’s Near-term Outlook

Article Excerpt

TECK COMINCO LTD. $65 (Toronto symbol TEK.B (old symbol TEK.SV.B); Conservative Growth Portfolio, Resources sector; SI Rating: Average) has dropped around 15% since it launched a $17.8 billion cash-and-stock hostile takeover bid for Inco Ltd. If successful, the purchase could increase the number of Teck class ‘B’ subordinate voting shares outstanding by 72%. Current investors fear that would dilute earnings and hurt the value of their holdings. Inco has recommended that its shareholders reject Teck’s offer. It’s also trying to fend off Teck by possibly merging with another mining company. That could force Teck to raise its offer. Teck Cominco is a hold. hold…

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