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Chipmaker Freescale, spun from Motorola, is a prime example of the power of spin-offsWhen MOTOROLA Inc. moved to spin off its $5.7 billion semiconductor business the newly launched company, Freeseale Semiconductor Inc., got no respect. Freescale shares made their debut at a limp $13, trading at less than 50% of the valuation accorded larger rival Texas Instruments Inc. Investors had lots of reasons to be skeptical. Freescale's business under Motorola had piled up hundreds of millions in losses in the early 2000s. Despite a massive restructuring, the unit was operating on razor-thin margins in hyper-competitive chip markets where it seemed to have lost its innovation edge. But those who didn't pay up for the stock were dead wrong. Just 15 months later, Freescale, which supplies embedded chips and software for wireless handsets and automobiles, is one hot tech company. Earnings jumped threefold in the latest quarter to $164 million on sales of $1.4 billion. Its stock, at $23, is up more than 70% from its starting point. How did the smart-money folks so badly underestimate Freescale? Given Motorola's troubled history, investors expected little from the spin-off. They also failed to appreciate the talents of Freescale's new CEO, Michel Mayer. And perhaps most important, they discounted the value that a properly executed spin-off can create. Of the 17 deals last year, 13 have beaten the Standard & Poor's 500-stock index by a wide margin. While disastrous spin-offs such as Delphi Corp. and Visteon Corp. may grab big headlines, many of the deals often result in far stronger businesses. That fact, in tandem with Wall Street's distaste for conglomerates, has a lot of CEOs becoming believers in the magic of spin-offs. American Express Co.'s Kenneth I. Chenault just set loose Ameriprise Financial Inc., its financial advisory business. Henry R. Silverman plans to divide Cendant Corp. into four companies next summer. And Sumner M. Redstone is working on a scheme to split CBS and Viacom Inc. by the end of this year. "Spin-offs usually create huge value because a business goes from being the redheaded stepchild in a large company to a business being run for its own interests," says Cornell. The decision to send a division off on its own isn't an easy one for most companies, and it wasn't for Motorola. The unit had been part of the company for 50 years, and its 22,000 employees were "family," recalls one insider. Then there was the matter of a customer-supplier relationship—Motorola accounts for about 25% of Freescale's revenues. Some execs worried that it would be a mistake to give up an integral part of the parent's innovation pipeline. Yet pressure grew from Wall Street and the board to delink so that Motorola could focus on its core markets. A team of top managers and directors considered the options, including the outright sale of its subsidiary or a carve-out that would sell just part of Freescale to the public. The final decision - probably the most critical to Freescale's ability to prosper - was to make a clean ownership break by distributing all Freescale shares to Motorola stockholders. That was key, because it meant Motorola was strongly motivated to craft a deal that would make Freescale totally independent and give it the resources to be a muscular player in its markets. Motorola needed Freescale to be strong so it could continue as a strategic supplier of parts for handsets and networking products. "This was about creating value by making Freescale a sustainable, independent company," says Donald F. McLellan, Motorola's vice-president of mergers and acquisitions. As a freestanding company, Freescale should be able to win new customers - especially in the wireless arena, where giants like Nokia Corp. and Samsung Electronics could be reluctant to do business with a supplier owned by a rival.
VOCABULARY: discount – зд. не принимать в расчет result in - приводить к; давать в результате result from - происходить в результате, быть следствием set loose = let loose – выпустить, предоставить свободу account for – являться причиной; составлять долю exec = executive - администратор, руководитель, руководящий работник pipeline - зд. ресурс; ожидаемые новые поступления; продукция, которая будет вот-вот выпущена in the pipeline – на подходе; в работе carve-out - выделение (продажа материнской компанией части акций своего подразделения)
TRANSLATION NOTES: razor-thin margins – минимальная (очень низкая) прибыль hyper-competitive chip markets – рынки с высокой конкуренцией среди производителей «микрочипов» Слова razor-thin и hyper-competitive относятся к категории сложных слов, которые переводятся либо описательным образом, либо путем калькирования. (См. часть Ш, раздел 2, §1, п.1.2) Слово чип от английского слова chip (микроэлектронный процессор) можно отнести к заимствованным словам, которые в настоящее время активно входят в русский язык. CEO= Chief Executive Officer - (главный) исполнительный директор (один из руководителей корпорации, отвечающий за основную часть её текущей деятельности); генеральный директор (корпорации), директор-распорядитель (фирмы), директор (предприятия). (См. часть Ш, раздел 2, §1, п.1.5)
NEW YORK -Philip Morris Cos. said it will cut its work force by more than 2,500 employees and take a $630 million pretax charge to jump-start its lagging overseas food division. The international food unit, which generates about $11 billion in annual sales, mostly in Europe, is the weakest business in Philip Morris's global portfolio. Hammered by unfavorable currency translations and high coffee prices, the division saw revenue decline 6% in the first nine months of this year. The tobacco and food giant said it plans to rid itself of nonstrategic product lines to focus more on its core businesses, including coffee, confections and cheese. In moves reminiscent of its domestic overhaul three years ago, Philip Morris plans to close several plants and consolidate sales and administrative functions abroad, shrinking its international food work force by about 8%. Annual savings from the restructuring, which the company said could approach $200 million, will be reinvested to increase "competitiveness and focus in core international food categories and markets," the company said. Philip Morris's moves also resulted from a loosening of labor restrictions in Europe, as well as the region's gradual transformation into a more unified market, analysts said. "New opportunities are opening up in Europe, as the European community allows for more efficient manufacturing and distribution," said Goldman Sach's Nomi Ghez, who noted that companies like Kellogg Co. and Unilever PLC recently have consolidated their European operations. Although a spokesman declined to specify where the cuts might take place, analysts believe nearly all the restructuring will take place in Europe, which is responsible for about 65% of the unit's revenue. Philip Morris is often cited for its widespread international presence, yet mostofits tobacco and food revenues are generated in Europe. Roughly 15% of the international food unit's sales come from Asia. In the first nine months, Philip Morris said, the unit continued to be hurt by a steep run-up in coffee commodity prices earlier in the year. Although commodity prices subsequently dropped, the company said third-quarter volumes were depressed by consumers' response to higher retail prices and by trade destocking. It blamed lower confectionery volumes partly on "exceptionally warm weather" in Scandinavia. The international food unit also is suffering indigestion from a recent binge on European candy companies. Since 1990, the company has spent more than $5.6 billion snapping up such chocolate giants as Jacobs Suchard AG and Freia Marabou AS. But the European candy market has been sluggish at best.
VOCABULARY: unfavorable currency translations – зд. невыгодный валютный курс product line - товарная линия, продуктовая линия (группа взаимосвязанных товаров, выпускаемых данным производителем под определенным названием и торговой маркой)
savings – экономия; сбережения
destocking - сокращение запасов
sluggish market – рынок, характеризующийся отсутствием экономической активности; вялый рынок
TRANSLATION NOTES: Philip Morris … will take a $630 million pretax charge… – Компания Филип Моррис выделит 630 млн долларов из общей суммы доходов до вычета налогов…
… the division saw revenue decline 6% - Доходы этого подразделения компании снизились на 6%. Здесь используется весьма характерный для английского языка прием п ерсонификации. Сравните: Last year saw a cold winter. – В прошлом году зима была холодной. This country boasts its coal deposits. – В этой стране богатые месторождения угля.
domestic overhaul – зд. полная реконструкция национальных предприятий, модернизация Слово domestic может служить хорошим примером вариантных словарных соответствий, когда одному слову в английском языке соответствует несколько значений в русском. (См. часть Ш, раздел 1, §2; также раздел 2, §4, п.4.1) domestic market – внутренний рынок domestic goods – товары, произведенные национальными компаниями domestic authorities – местные власти Philip Morris's moves also resulted from a loosening of labor restrictions in Europe, as well as the region's gradual transformation into a more unified market, analysts said. Перевод данного предложения лучше начать с конца, т.к. это в большей степени соответствует порядку слов, типичного для русского текста: По мнению специалистов… (См. часть Ш, раздел 3, §2) Philip Morris is often cited… - Часто ссылаются на (цитируют) слова (мнение) представителей компании Филип Моррис … Перевод сказуемого в страдательном залоге требует особого внимания, т.к. не все глаголы, образующие пассивные конструкции в английском языке, употребляются в страдательном залоге в русском языке. (См. часть Ш, раздел 3, § 7) higher retail prices – рост розничных цен Прилагательное в сравнительной степени удобно переводить при помощи существительного. … the unit also is suffering indigestion from a recent binge on European candy companies … - это подразделение испытывает трудности и в связи с его недавними крупными слияниями и поглощениями европейских компаний, производящих сладости… Язык английской прозы более эмоционален, нежели русский, поэтому при переводе часто утрачивается образность отдельных слов, как, например, в данном предложении при переводе слов indigestion (несварение желудка, нарушение пищеварения) и binge (кутёж, чрезмерное употребление, пристрастие к ч-л). Поэтому перевод звучит не столь образно, как оригинал. Выбор лексики не случаен и многое говорит о положении дел в компании. Сравните: When Ann is depressed she binges on chocolates. (См. часть Ш, раздел 2, §5)
10. Japanese May Aid Chemicals Industry Japan’s ailing petrochemical industry may be offered fiscal incentives to encourage rationalization. A strong possibility exists that tax exemptions, interest-free loans and other incentives could be offered to the industry in an effort to help restructuring, said Mr Hajime Furuta, director of the basic chemicals division of Japan’s Ministry of International Trade and Industry. Restructuring was needed because the Japanese petrochemicals industry was weak and uncompetitive, added Mr Furuta, in London for the Financial Times conference on petrochemicals. The plight of the Japanese industry, the world’s second largest after that of the US, with an annual turnover of nearly $65bn was worse than in the last recession 10 years ago. Consumer demand seemed saturated and the inventory adjustment would last longer than during the last recession. Raw material prices were lower this time. The industry had severe structural problems because of excessive competition. The sector was highly fragmented, with 12 ethylene manufacturers. The largest had 12 per cent of the market and the smallest 6 per cent. Alliances and other forms of cooperation were needed, with both domestic and foreign partners. In the scramble for market share, excess capacity had been built up. Annual Japanese production next year would be 7.3m tones, while demand would be 6m tones. The industry was facing increased competition from other Asian producers, especially South Korea. Miti estimates a global oversupply of ethylene of 5.2m tones a year. In addition, the slowdown in the Japanese economy meant there was more than two months’ worth of stocks. The industry’s profits last year had already fallen 45 per cent to under $80m. For the first half of this year, the figures were worse, with profits down 80 per cent to $12m. Five ethylene producers were in the red and others would follow. There was no question of intervention. But Miti would try to act as a catalyst.
VOCABULARY: fiscal incentives - меры по стимулированию (в данном случае – рационализации отрасли) за счет средств государственного бюджета (в виде налоговых льгот, послаблений, беспроцентных займов и т.д.) incentive - поощрение, стимул, побуждение
tax exemption - освобождение от уплаты налогов
interest-free loan - беспроцентный заем
turnover - товарооборот (суммарная стоимость продаж за отчетный период (для отдельной компании, отрасли или экономики в целом); объем продаж annual turnover - годовой товарооборот recession - спад, рецессия saturation – насыщение рынка; положение на рынке, когда предложение полностью удовлетворяет спрос Consumer demand seemed saturated… - Казалось, что рост спроса приостановился
inventory adjustment – зд. распродажа товарно-материальных запасов raw material - сырьё
excess capacity - избыточная [неиспользуемая] производственная мощность, резерв производственной мощности
slowdown – замедление темпов роста (экономики)
intervention - вмешательство
TRANSLATION NOTES: Japan’s ailing industry may be offered… - Возможно промышленности Японии, испытывающей трудности, будут предложены…. Модальный глагол may в зависимости от контекста выражает либо позволение, либо возможность совершения действия и тогда он переводится как «возможно», «возможно, что». (См. часть Ш, раздел 3, §3, п.3.1) A strong possibility exists…, said Mr Furuta, director of the basic chemicals division of Japan’s Ministry of International Trade and Industry. – По словам главы подразделения Министерства Внешней торговли и Промышленности по производству базовых химических продуктов Фуруты велика вероятность….. В английском языке источник информации, обстоятельства места и времени, стоят в конце предложения, в русском языке – в начале. (См. часть Ш, раздел 3, §2)
the industry was facing increased competition from… – данной (фармацевтической) отрасли (а не промышленности в целом) грозил рост конкуренции со стороны … При переводе необходимо обращать большое внимание на артикли, некоторые из которых требуют конкретизации значения. (См. часть Ш, раздел 3, §10) Причастие прошедшего времени часто переводится существительным. increased prices – рост цен (См. часть Ш, раздел 3, §6) there was more than two months’ worth of stocks – количество запасов было достаточно для бесперебойной работы в течение более двух месяцев Основное широкое значение слова stock(s) – «материальная база». Перевод этого слова на русский язык – «запас», «товар», «инвентарь», «акционерный капитал», «акции», «поголовье скота» - всегда необходимо давать по контексту. (См. часть Ш, раздел 2, §4, п.4.1) stock of goods – запас товаров stock of orders – портфель заказов stocks and bonds – акции и облигации from stock – со склада stock in transit – груз в пути
VOCABULARY CHECK 1) Существует несколько способов повышения эффективности деятельности компании: внутреннее развитие, сокращение масштаба, увеличение масштаба. 2) Отделившаяся от материнской компании фирма сконцентрировалась на своем основном виде деятельности. 3) Центр прибыли - это подразделение компании, получающее прибыль самостоятельно и независимо от деятельности основного подразделения. 4) Выкуп за счет кредита - покупка контрольного пакета акций компании, финансируемая выпуском новых акций или с помощью кредитов, которые должна погасить сама компания. Обеспечением служат ее активы. 5) Внутренний управленческий выкуп - покупка компании или части компании группой ее управляющих. 6) Рисковый капитал в основном вкладывается в новые или реорганизуемые компании, в том числе малые предприятия с высоким потенциалом развития. 7) "Бросовые облигации" - высокодоходные облигации корпорации с кредитным рейтингом ниже инвестиционного уровня. 8) Фирма, активно использующая заемные средства, может иметь высокую рентабельность инвестиций (return on investment, ROI). 9) Прибыль компании за последний квартал выросла в 3 раза и составила 150 миллионов долларов при объеме продаж в 1,5 млрд.долларов.
SECTION 4 MERGERS AND ACQUISITIONS LEAD-IN Mergers and acquisitions and corporate restructuring - or M&A for short - are a big part of the corporate finance world. Every day, Wall Street investment bankers arrange M&A transactions that bring together separate companies to make larger ones Although they are often uttered in the same breath and used as though they were synonymous, the terms "merger" and "acquisition" mean slightly different things. When a company takes over another one and clearly becomes the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist and the buyer "swallows" the business, and stock of the buyer continues to be traded. In the pure sense of the term, a merger happens when two firms, often about the same size, agree to go forward as a new single company rather than remain separately owned and operated. This kind of action is more precisely referred to as a merger of equals. In practice, however, actual mergers of equals don't happen very often. Often, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it's technically an acquisition. Being bought out often carries negative connotations. By using the term "merger," dealmakers and top managers try to make the takeover more palatable. A purchase deal will also be called a merger when both CEOs agree that joining together in business is in the best interests of both their companies. But when the deal is unfriendly, or hostile - that is, when the target company does not want to be purchased - it is always regarded as an acquisition. So, whether a purchase is considered a merger or an acquisition really depends on whether the purchase is friendly or hostile and how it is announced. Takeovers happen over the objection of the board and usual procedure is through the purchase of stock in thetarget company. Stock might be acquired through open market purchase, private transactions or launching a bid (tender offers). When a takeover attempt runs into very serious objections from the board of directors of the target company, it is referred to as a hostile takeover.
The takeover process is often described in terms of one animal hunting another: a company or individual seeking to take over another company may be referred to as a predator, and the target company as the prey. Predators are also referred to as raiders or corporate raiders.
The tender offer price may not be high enough for the target company's shareholders to accept, or the specific terms of the deal may not be attractive. In a merger, there may be much at stake for the management of the target - their jobs, in particular. So, if they're not satisfied with the terms laid out in the tender offer, the target's management may try to work out more agreeable terms that let them keep their jobs or, perhaps even better, send them off with a nice, big compensation package. Board members worrying about losing their jobs as a result of a takeover can contrive for themselves something known as a golden parachute.
A company wishing to resist, ward off, or fend off being taken over has a number of options. A poison pill scheme can be triggered by a target company when a hostile suitor acquires a predetermined percentage of company stock. To execute its defense, the target company grants all shareholders - except the acquirer - options to buy additional stock at a dramatic discount. This dilutes the acquirer's share and intercepts its control of the company. A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities is dilution. It may devise plans that give existing shareholders special rights, or it may make itself less attractive to bidders by selling off a valuable part of the company, or holding on to an unattractive one. The company’s additional defence measures are sometimes called shark repellent. As an alternative, the target company's management may seek out a friendlier potential acquirer, or white knight. If a white knight is found, it will offer an equal or higher price for the shares than the hostile bidder. Bidders may agree to withdraw their bid if paid enough money for the shares they hold in the target company. This is greenmail. A spin-off of the term "blackmail", greenmail occurs when a large block of stock is held by an unfriendly company or raider, who then forces the target company to repurchase the stock at a substantial premium to destroy any takeover attempt. VOCABULARY
COMPREHENSION QUESTIONS: 1) What is the difference between mergers and acquisitions? 2) What kind of action is referred to as a merger of equals? 3) What is a hostile takeover? 4) What kind of agreement may the target’s management try to work out? 5) What are the options of a company wishing to ward off being taken over? 6) What does dilution imply? 7) When does a target company look for a white knight? 8) What should a target company do if it comes up against greenmail?
VOCABULARY PRACTICE The business was acquired from Orion four years ago. The industry’s wave of mergers and acquisitions continues. Medeva, the fast-growing pharmaceuticals group, rose 19p to 224p on the news that it has made another acquisition in America. Medeva is to buy Adams Laboratories, a Texas drugs manufacturer, for $77.2 million. White Knight - is a company (the “good guy”) that gallops in to make a friendly takeover offer to a target company that is facing a hostile takeover from another party (a “black knight”). The white knight offers the target firm a way out with a friendly takeover. London Weekend Television’s attempt to attract a white knight to help it ward off the unwanted takeover bid from Granada has collapsed. US West, the giant US telephone company and one of the largest cable operations in the UK, was interested in a stake of 29.9 per cent in the London ITV company – the largest amount possible without triggering a full bid. Now that Oracle has more than 60% of PeopleSoft's outstanding shares the question is can the PeopleSoft board of directors stop the hostile takeover? The answer is they probably can with a poison pill tactic used by most companies, including Oracle, to prevent such a takeover. In PeopleSoft's case it is called a Shareholder Rights Plan and gives the board, at their discretion, the right to issue new shares of the stock. By distributing more shares and thus diluting the stock, it becomes virtually impossible for Oracle to gain a majority ownership of the outstanding shares of stock. A golden parachute can be used as a measure to discourage an unwanted takeover attempt.
TEXTS TO TRANSLATE: 11. Olivetti on Verge of $60bn Bid for Telecom Italia Olivetti, the Italian telecommunications group, is tomorrow set to launch a $60bn tender offer to take control of Telecom Italia, the telecommunications giant, in the largest takeover bid in Italy's corporate history. The bid, expected to be announced at a board meeting in Milan, would mark the first attempt by a private sector company to take control of a big previously state-owned company. The aim will be to secure 100 per cent of TI's share capital in a public offer. Success would be a milestone for Italian capitalism. Olivetti's market capitalization, at about $10bn, is several times lower than that of TI. The company is expected partially to fund the offer through borrowing from a consortium of banks, expected to be in the range of $25bn to $30bn. It is also set to announce the sale to Germany's Mannesmann of its $12bn stake in Oilman, the two companies' joint venture through which they run Omnitel and Infostrada, the mobile and fixed telephone operators. The remaining cash is expected to be raised by selling TI assets. It is understood that there are no plans to dispose of Telecom Italia Mobile, TI's profitable mobile telephone operator. The four banks understood to be financing the $30bn loan are Chase Manhattan, Donaldson Lufkin & Jenrette, Mediobanca and Lehman Brothers. Some telecoms analysts said it was hard to see what added value Olivetti's management would bring to a company the size of TI. Nevertheless, Olivetti shares rose nearly 8 per cent in trading on the Milan bourse on speculation about the bid. TI shares rose 2 per cent. Only two years ago Olivetti was close to bankruptcy. It has been in behind-the-scenes talks with the Italian government about the planned bid, which could raise political concerns in a country that has never seen a corporate takeover on this scale. TI is run by a small nucleus of strategic shareholders that owns 6.96 per cent of the stock. The Italian Treasury has a "golden" share of 3.4 per cent but is expected next week to announce the name of an investment bank that will advise on the sale. There were suggestions last night that ministers would view an Olivetti bid favourably as a means of avoiding a takeover from outside Italy. "The Treasury's view on an Olivetti bid is pretty neutral," said a person close to ministers. "There are also a number of ministers in the cabinet who view the bid with favour." Many telecoms analysts regard TI as an undervalued company that has suffered from confused management. But Franco Bernabe, appointed chief executive in December, has a reputation as a turnaround manager and TI's share price has performed strongly since his appointment. Nevertheless, people close to Olivetti said TI was still hampered by differences between its core shareholders.
VOCABULARY: be on the verge of (doing smth) – собираться, намереваться сделать что-л Syn.: be set to do smth; be on the brink of (doing smth); be about to do smth public offer (= public offering) - публичное предложение (ценных бумаг), открытое размещение; предложение ценных бумаг широкому кругу инвесторов market capitalization - рыночная капитализация: общая стоимость всех выпущенных в обращение акций компании, т. е. произведение рыночной стоимости одной акции на число акций в обращении value added – добавленная стоимость: разница между продажами компании за определенный период и издержками на материалы, компоненты, услуги
bourse - франц. фондовая биржа (в каком-л. европейском центре, кроме Лондона) confused management – некомпетентное руководство turnaround manager – антикризисный управляющий
12. Azucarera Agrees To Acquire Puleva In 590 Million Deal Azucarera SA, the largest Spanish sugar company, has agreed to a friendly takeover of milk producerPuleva SA, in a 590 million euro deal that would create the country's largest food company. The boards of the two companies are scheduled to meet today to determine the terms of the takeover. Azucarera, created through the merger of the two largest Spanish sugar companies, and Puleva would have a combined market capitalization of 263 billion pesetas (1.58 billion euro) and sales of 360 billion pesetas. The agreement comes after years of difficult corporate restructuring within the heavily government-regulated milk and sugar industries. Because sugar prices and production are closely controlled by the European Union, sugar companies can increase profit only through cost reductions or diversification. To ensure that Spain's European Union quotas for sugar production don't fall into foreign hands, successive Spanish governments have kept a tight hold on the publicly traded company. Generate Sucriere SA, a unit of French group Saint-Louis SA, currently owns 21% of Azucarera, and analysts suggested that the merger with Puleva might be a defensive move aimed at protecting the Spanish sugar group from the unwanted advances of the French. Two years ago the government engineered the merger of Sociedad General Azucarera de Espana SA and Ebro Agricolas Cia de Alimentacion SA in an effort to create a national champion big enough to be restructured without losing control of the domestic market. Spain has trailed far behind other European countries in moves to streamline, both its milk and sugar industries. Nonetheless, plans to restructure the sugar industry have met with stiff resistance from regional governments throughout Spain, which worry about the lossof jobs.
VOCABULARY: SA - sociedad anonima - (исп.) акционерная компания streamline – упростить, усовершенствовать, модернизировать TRANSLATION NOTES: To ensure that Spain's European Union quotas for sugar production don't fall into foreign hands… - Для того, чтобы европейская квота Испании … не перешла к другим странам (не попала в руки иностранных конкурентов) … Перевод инфинитивных конструкций всегда требует контекстуального осмысления, т.к. имеет в английском языке множество функций (определение, дополнение, подлежащее, обстоятельство цели и т.д.) (См. часть Ш, раздел 3, §4)
the merger with Puleva might be… Модальный глагол might выражает меньшую вероятность совершения действия и может переводиться как возможно, может быть. (См. часть Ш, раздел 3, §3, п.3.1)
13. Phelps Dodge Strikes Deal For Cyprus: $1.8 Billion NEW YORK — Phelps Dodge Corp., the largest U.S. copper producer, said Thursday it had struck a friendly deal to buy Cyprus Amax Minerals Co. for $1.8 billion in cash and stock, ending a monthlong hostile takeover effort and killing a two-month-old merger pact between Cyprus and Asarco Inc. Phelps Dodge sweetened its earlier hostile offer by about $65 million in cash. Based on recent stock prices for Phelps Dodge, the deal values Cyprus at about $19.80 a share. The deal is expected to help Phelps Dodge compete more effectively in the volatile copper industry, which has been hurt by overcapacity and low prices. Phelps Dodge, which is based in Phoenix, Arizona, and Cyprus, of Englewood, Colorado, entered friendly talks this week after Cyprus and Asarco amended their merger pact to allow each company to negotiate with other buyers. Cyprus and Asarco also delayed a shareholder vote on their deal as it became apparent other suitors had emerged. "We are extremely pleased that we were able to reach a negotiated agreement with Cyprus Amax that is clearly in the interest of both companies," Douglas Yearley, the chief executive of Phelps Dodge, said. Asarco, meanwhile, is the targetof competing offers from Phelps Dodge and the Mexican mining and rail company Grupo Mexico SA. Asarco, which is based in New York, did not comment on the Phelps-Cyprus deal but said it would “explore all alternatives available to the company." Phelps Dodge said it was still interested in buying Asarco. Phelps Dodge will exchange 0.2203 of a share and $7.61 in cash for each of Cyprus's 90.7 million shares outstanding. Shares of Phelps Dodge rose 6.25 cents in late trading to $55.375, while Cyprus rose 25 cents to $19.50. Asarco stock slipped 43.75 cents to $27.
VOCABULARY: overcapacity - избыточные производственные мощности
shares outstanding - выпущенные и находящиеся в обращении акции
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