Xstrata to bump up stake in Falconbridge

Xstrata PLC,the Swiss company bidding to acquire Canadian miner Falconbridge Ltd., said Thursday that it will buy up to five per cent more of the company on the open market.

Buying the stake through the stock market would increase Xstrata's holding in Falconbridge to 25 per cent from its current 20 per cent.

Xstrata said its stock purchaseswill begin July 28.

The Swiss company is currently wrapped up in a complicated bidding war involving four other companies — Inco Ltd., Falconbridge, U.S. mining company Phelps Dodge and Canadian firm Teck Cominco Ltd. — which could remake the face of Canada's mining sector.

Xstrata currently has a cash bid of $63.25 per share on the table for Falconbridge. That offer expires on Aug. 14.

"The purchase of up to five per cent of Falconbridge common shares on market will be undertaken with the sole aim of assisting Xstrata to achieve its consistently stated objective of acquiring 100 per cent of Falconbridge common shares," the company said in a statement.

Inco's current bid for Falconbridge is worth $65.34 in cash and stock. Phelps Dodge has made an offer to buy Inco, but recently said it wouldn't support Inco in a richer bid for Falconbridge.

Earlier this week, the Canadian government's competition regulators gave Xstrata clearance to proceed with its offer for Falconbridge.

Vancouver-based Teck Cominco has also made a hostile bid for Inco.