Teck sweetens Inco bid

Teck Cominco has boosted its takeover offer for Inco by $2.7 billionin a bid to persuade Inco's board andshareholders thatits hostile offer is superior to a friendly onefrom U.S. mining company Phelps Dodge.

On Monday, Teck said it would increase the value of its offerto $82.50 a share. The previous offer was worth $78.50 a share.

The new offer gives shareholders more cash and fewer shares. They now have the option of taking cash or 1.1293 Teck Cominco shares plus five cents a share for each Inco share tendered.

The cash component is capped at $9.1 billion, so ifall shareholders chose the cash option,they would get $40 cash and 0.5821 of a Teck Cominco Class B share for each of their Inco shares.

"Inco shareholders have a choice between the certainty and value of our offer and the highly conditional offer by Phelps Dodge, which will not close until September at the earliest, if at all," Teck Cominco CEO Don Lindsay said in a statement.

"We have all regulatory approvals we require to complete our offer on Aug. 16," he said.

Inco said it would review the new offer. "The Inco board of directors will evaluate the revised offer and will provide Inco shareholders with a formal recommendation as soon as it has completed its analysis," an Inco statement said.

Ever since it launched its bid for Inco in May, Teck Cominco has said the offer was conditional on Inco abandoning its bid to acquire rival miner Falconbridge. Last Friday, Inco did just that after a majority of Falconbridge shareholders declined to tender their stock to the Inco offer.

With Inco conceding defeat, Swiss miner Xstratais now moving to acquire Falconbridge.

Inco shares trade above offer price

For its part, Inco has already agreed to be acquired by Phelps Dodge. The Arizona-based company had hoped to acquire both Inco and Falconbridge, but said it will proceed with its offer for Inco alone.

The Phelps Dodge offer values Inco shares at about $85each at current prices, but Inco stock has been trading well above that as shareholders believe the bidding war is not over. Inco shares closedMondayat $87.77, up $1.20.

"It is pretty apparent that there is a lot of speculation built in to the Inco stock price which we don't believe is justified," Lindsay told an analyst conference call.

Lindsay said if there were no takeover offers on the table, Inco shares would likely be trading in the low $60 range"at best."

"The market has run wild on speculation of a bidding war for Inco— and who knows, stranger things have happened— but we will not be drawn into that," Lindsay said.