Sterlite trumps Grupo Mexico with a $2.565 billion bid for Ascaro

Sterlite Industries (India) Ltd on Friday increased its open offer price for US copper miner Asarco LLC by almost three per cent to $2.565 billion in its year-old battle with Grupo Mexico SAB for control of the bankrupt company.

Crippled by asbestos-related lawsuits, Asarco has been under bankruptcy protection since 2005. Grupo Mexico acquired Asarco in 1999, but lacks board control due to the bankruptcy. Last month, a US court had recommended that Grupo Mexico be allowed to take control of Asarco as it was more likely to pay Asarco's creditors in full.

"After extensive discussions and review, in order to provide full cash payment to asbestos creditors ... Sterlite increased its offer from $2.135 billion to $2.565 billion cash," the company said in a statement to the stock exchanges. The increase was to cover late and subordinated claims and to ensure surplus cash for smooth operations of Asarco, Sterlite added.

Mumbai-based Sterlite is the India-focused unit of UK-based Vedanta Resources Plc, controlled by Anil Agarwal. It is the country's largest copper producer.

Grupo Mexico had offered $2.5 billion for Asarco last month. Both companies want to buy Asarco to gain control of the company's copper mines in Arizona. Prices of the metal doubled this year on rising Chinese demand and optimism that the US economy will recover from a recession.

Grupo Mexico seems to have an edge as it secured a court recommendation on 31 August to be allowed to regain control of Asarco. US bankruptcy judge Richard Schmidt sent his recommendation to a district court judge who will make the final decision on Asarco by the end of December.