This
Amendment No. 21 to Schedule 14D-9 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 originally filed by Inco on May 31, 2006 and amended on May 31, June 5,
June 6, June 7, June 12, June 13, June 14,
June 22, June 23, June 26, June 27, June 30,
July 5, July 11, July 14, July 17, July 18 and July 19, 2006.
Except as otherwise indicated, the information set forth in the original Schedule 14D-9 and
previous amendments thereto remains unchanged. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Schedule 14D-9.
Item 7.
Purposes of the Transaction and Plans or Proposals.
Item 7 is
hereby amended and supplemented by adding the following hereto:
On July 16, 2006, Inco Limited (“Inco”), together with Falconbridge Limited (“Falconbridge”) and
Phelps Dodge Corporation (“Phelps Dodge”), announced that they had entered into a number of
agreements, described below, relating to, among other things, (i) an increase in the consideration
under Inco’s outstanding offer (the “Offer”) to
acquire all of the outstanding common shares of Falconbridge and
(ii) an increase in the consideration payable to shareholders of Inco under the proposed statutory plan of arrangement involving Inco and Phelps Dodge to be effected under the Canada Business Corporations Act (the “Arrangement”).
On July 16, 2006, Inco further varied its Offer in order to, among other things, (a)
increase the consideration payable under the Offer for each Falconbridge common share by
Cdn.$1.00 per share from Cdn.$17.50 in cash and 0.55676 of an Inco Share to Cdn.$18.50 in
cash and 0.55676 of an Inco share, on a fully prorated basis, (b) reduce the Minimum Tender
Condition (as defined below) from 66⅔% to 50.01%, (c) extend the expiry time of the Offer
from midnight (Vancouver time) on July 24, 2006 to midnight (Vancouver time) on Thursday,
July 27, 2006, and (d) provide that the consideration under the Offer will not be reduced by
the amount of the special dividend declared by Falconbridge on July 16, 2006, of Cdn.$0.75
in cash per share payable to Falconbridge common shareholders of record on July 26, 2006,
with a payment date of August 10, 2006 (the “Falconbridge Special Dividend”).
The minimum tender condition under the Offer provides that there be validly deposited under
the Offer and not withdrawn at the expiry time of the Offer such number of Falconbridge
common shares which, together with any Falconbridge common shares directly or indirectly
owned by Inco, constitutes at least 50.01% (formerly 66⅔%) of the Falconbridge common shares
outstanding at the expiry time of the Offer (calculated on a fully-diluted basis) (the
“Minimum Tender Condition).
Waiver and First Amendment to Combination Agreement between Inco and Phelps Dodge
On July 16, 2006, Inco and Phelps Dodge entered into a Waiver and First Amendment to Combination
Agreement (the “Waiver and Amendment”) for the purpose of waiving or amending certain provision of the combination agreement (as amended, the “Combination Agreement”) originally entered into by Inco
and Phelps Dodge on June 25, 2006.
The Waiver and Amendment provides that the consideration payable for each common share of Inco
under the proposed Arrangement will be increased by Cdn.$2.75 in cash
from (i) Cdn.$17.50 in cash
and 0.672 of a Phelps Dodge common share to (ii) Cdn.$20.25 in cash and 0.672 of a Phelps Dodge common
share.
The Waiver
and Amendment removed Section 8.1(g) of the Combination Agreement, which had
provided that the respective obligations of Phelps Dodge and Inco to
effect the Arrangement were conditioned on either Inco having
completed a subsequent acquisition transaction and having acquired all
of the common shares of Falconbridge or the Support Agreement between Inco and Falconbridge (described below) having been terminated in accordance with its terms. The Waiver and Amendment added a new condition
precedent to the Arrangement in favour of Phelps Dodge that provides that Inco shall have acquired
at least 50.01% of the Falconbridge common shares under the Offer and, if Inco shall have acquired at
least two-thirds of the common shares of Falconbridge, then Inco shall have completed a subsequent
acquisition transaction in order to acquire any remaining
Falconbridge common shares, or that the Support Agreement (as defined below) shall have been terminated in accordance with its
terms without Inco having acquired any Falconbridge common shares under the Offer.
Inco and Phelps Dodge also agreed that, in the event that Inco
acquires at least 50.01% but less than two-thirds of the Falconbridge common shares, Phelps Dodge
may, with the prior consent of Inco (which consent Inco may not unreasonably withhold), postpone
the special meeting of Phelps Dodge’s shareholders, which meeting is to be called to consider the
amendment to Phelps Dodge’s restated certificate of incorporation and the issuance of Phelps Dodge common
shares pursuant to the terms of the Arrangement, until Inco has acquired at least two-thirds of the
Falconbridge common shares.
The Waiver and Amendment amended Section 9.3(b)(vi) of the Combination Agreement to provide that
Inco will be required to pay Phelps Dodge a termination payment of $925 million in certain
circumstances (increased from $475 million) from and after the date that Inco has acquired at least
50.01% of the Falconbridge common shares. The Combination Agreement had previously provided that
such increase was payable from and after the date that Inco had acquired at least two-thirds of
the Falconbridge common shares.
The Waiver and Amendment also amended Section 5.1 of the Combination Agreement to provide that Inco
may make market purchases of up to 5% of the Falconbridge common shares outstanding on the date of
the original Offer in accordance with applicable securities laws and Section 12 of the original
Offer.
Pursuant
to the Waiver and Amendment, Phelps Dodge consented to, among other
things, the
Cdn.$1.00 increase in the cash consideration offered to Falconbridge shareholders for each Falconbridge common
share under the Offer, assuming full proration, the reduction of the Minimum
Tender Condition under the Offer from 66⅔% to 50.01%, and to Inco entering into the Sixth Amendment (as defined
below), including to provide for the Falconbridge Special Dividend.
Sixth Amendment to Support Agreement between Inco and Falconbridge
On July 16, 2006, Inco entered into a sixth amending agreement (the ''Sixth Amendment’’) with
Falconbridge to amend the support agreement (as amended, the “Support Agreement”) originally
entered into by Inco and Falconbridge on October 10, 2005, as subsequently amended on January 12,
2006, February 20, 2006, March 21, 2006, May 13, 2006 and June 25, 2006, respectively.
Under the
terms of the Sixth Amendment, Inco agreed to increase the maximum
cash consideration offered to Falconbridge
common shareholders pursuant to the Offer to Cdn.$7,080,125,473, or Cdn.$1.00 per Falconbridge common share on a prorated basis. As a
result, Falconbridge common shareholders will be entitled to elect to
receive either (a) Cdn.$60.20 in cash per Falconbridge
common share held, or (b) 0.80312 of an Inco common share plus
Cdn.$0.05 in cash per Falconbridge common share held, subject,
in each case, to proration based upon the maximum amount of cash
available and the maximum number of Inco common shares issuable under
the Offer. Assuming all Falconbridge common shareholders tendered to the Cash Alternative (as defined
in the Offer) or all Falconbridge common shareholders tendered to the Share Alternative (as
defined in the Offer), each Falconbridge common shareholder would be entitled to receive
Cdn.$18.50 in cash and 0.55676 of an Inco common share for each Falconbridge common share
tendered, subject to adjustment for fractional shares.
Under the terms of the Sixth Amendment, Falconbridge acknowledged the reduction of the Minimum
Tender Condition under the Offer from 66⅔% to 50.01%, with the result that the Offer is subject to the condition
that there have been validly deposited under the Offer and not withdrawn at the expiry time of
the Offer such number of Falconbridge common shares which, together with any Falconbridge common
shares directly or indirectly owned by Inco, constitutes at least 50.01% of the Falconbridge common shares outstanding at the
expiry time of the Offer (calculated on a fully-diluted basis).
Also under the terms of the Sixth Amendment, Inco consented to the declaration and payment of the Falconbridge
Special Dividend and agreed that Falconbridge would be permitted to
reduce the exercise price of any option outstanding on July 16,
2006 under its stock option plans that are exercised after
July 16, 2006 by the amount of the Falconbridge Special Dividend
in respect of each Falconbridge common share for which any such
option is exercised. Inco also agreed to amend the Offer to provide
that the per share consideration under the Offer will not be reduced by the payment of the Falconbridge
Special Dividend (which would otherwise have occurred pursuant to the
terms of the Offer).
The
foregoing descriptions of the Waiver and Amendment and the Sixth Amendment do not purport to be complete and are
qualified in their entirety by reference to the Waiver and Amendment
and the Sixth Amendment, which are filed as Exhibits
(e)(15)–(16) hereto and incorporated herein by reference.
Item
9. Exhibits.
Item 9
is hereby amended and supplemented by adding the following hereto:
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(a)(47) |
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Press release issued by Inco on
July 19, 2006 (incorporated by reference to Inco’s filing
pursuant to Rule 425 on July 20, 2006) |
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(a)(48) |
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Press release issued by Inco on July 20, 2006 (incorporated by reference to Inco’s filing
pursuant to Rule 425 on July 20, 2006)
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