Teck, Fording confident in takeover proceeding
By Cameron French
TORONTO (Reuters) - Teck Cominco (TCKb.TO: Quote) moved to quell concerns about its $13.7 billion takeover of Fording Canadian Coal Trust FDG_u.TO on Tuesday, saying it believed financing for the deal was solid and that it had options if one of its lenders withdrew.
"We are working hard to complete the financing by September 30, and we look forward to closing the deal," Teck Chief Executive Don Lindsay said on a webcast to address investors who have grown jittery about the $9.8 billion Teck is borrowing to finance the deal.
"We have no indications (the financing) will not conclude on schedule."
Separately, Fording spokesman Colin Petryk said Teck has assured the trust that the turmoil in financial markets has not affected its ability to secure financing for the deal.
However, shares of both companies fell on Tuesday, and Fording's units stayed well below the offer price, suggesting concerns remain.
Teck offered $14.1 billion in cash and stock for Fording in July. A decline in Teck's shares since then has pulled the deal's value down to around $13.7 billion.
Fording units had fallen as much as 24 percent since Friday amid a growing financial crisis in the United States.
In particular, investors worries about the role of Merrill Lynch MER.N, which is one of six banks in the lending syndicate. The troubled U.S. bank has agreed to be taken over by Bank of America Corp (BAC.N: Quote). Continued...