SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
SCHEDULE 14D-9/A*
AMENDMENT NO. 1
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
_________________
ASARCO INCORPORATED
Name of Subject Company
ASARCO INCORPORATED
Name of Person(s) Filing Statement
COMMON STOCK, NO PAR VALUE PER SHARE
Title of Class of Securities
043413103
CUSIP NUMBER OF CLASS OF SECURITIES
FRANCIS R. MCALLISTER
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
ASARCO INCORPORATED
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
212) 510-2000
Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement
With Copies to
J. MICHAEL SCHELL
MARGARET L. WOLFF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
212) 735-3000
*Relates to offer by Grupo MExico, S.A. de C.V.
This Amendment No. 1 to the Solicitation/Recommendation Statement on
Schedule 14D-9 of ASARCO Incorporated, originally filed with the Securities
and Exchange Commission (the "Commission) on October 5, 1999 (the "Schedule
14D-9"), relates to the tender offer for all of the outstanding shares of
ASARCO Common Stock which is described in a Tender Offer Statement on
Schedule 14D-1 of of Grupo MExico, S.A. de C.V., a Mexican corporation
("Grupo MExico"), and its wholly owned subsidiary, ASMEX Corporation, a
Delaware corporation ("ASMEX"), filed with the Commission on September 27,
1999, as amended. Defined terms used but otherwise not defined herein
shall have the meanings ascribed to such terms in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Subsection (b) of Item 4 is hereby amended by adding the following:
On October 7,1999, ASARCO received the following unsolicited letter
from Grupo MExico:
"October 7, 1999
"Board of Directors
ASARCO Incorporated
180 Maiden Lane
New York, NY 10038
"Attention: Francis R. McAllister
Chairman and Chief Executive Officer
"Dear Members of the Board:
"Based on our assessment of the pending offer by Phelps
Dodge Corporation as reflected in your announced agreement with
them, and our view of the intrinsic value in ASARCO Incorporated
that Grupo Mexico, S.A. de C.V. could realize if Grupo Mexico
owned ASARCO, we are today increasing the price in our September
27 tender offer to ASARCO shareholders for all outstanding shares
of ASARCO to $29.50 per share in cash. The other terms of our
September 27 tender offer remain substantially unchanged.
"Our revised offer provides value to your shareholders that
is demonstrably superior to your agreement with Phelps Dodge.
This offer represents a premium of 5% over the value of your
recently announced agreement with Phelps Dodge based upon the
October 6, 1999 closing price of $53.00 per share for Phelps
Dodge common stock, and a premium of 59% over ASARCO's unaffected
stock price on August 20, 1999, immediately prior to the
announcement of Phelps Dodge's proposal.
"As a result, we believe that you can, and indeed are
obligated to, meet with us and discuss our revised offer.
Accordingly, we request that, pursuant to Section 5.9 of your
agreement with Phelps Dodge, you elicit such advice and make such
determinations in view of your fiduciary duties so that ASARCO
would be in a position to immediately engage in negotiations and
discussions with us concerning our superior proposal. We also
believe that you cannot, consistent with your fiduciary duties,
continue to recommend to your shareholders the transaction with
Phelps Dodge in light of our revised offer.
"As before, our execution of a merger agreement would not be
contingent upon a due diligence review. Furthermore, in view of
the fact that we have been granted "early termination" of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act, we are confident that consummation of our proposed
transaction is not subject to any material regulatory approvals.
"Our revised offer presents a compelling opportunity for
ASARCO and its shareholders to improve upon your existing
transaction with Phelps Dodge.
"Our offer, of course, continues to be conditioned upon
entering into a negotiated agreement with you. As in the past, we
are prepared to meet with you at any time to negotiate the terms
of a merger agreement having substantially the same terms and
conditions that were contained in the form of merger agreement
that was submitted to you on October 5, 1999, modified to (i)
remove our request for the "match" right in connection with
competing proposals set forth in the "no-shop" provision and
replacing it with the relevant provision in your Phelps Dodge
Agreement, (ii) reflect the termination of your agreement with
Phelps Dodge and (iii) incorporate certain provisions from your
agreement with Phelps Dodge, provided that you enter into an
agreement with us on or before October 15, 1999.
"Please contact us to schedule a meeting of our respective
advisors to bring this situation to a prompt and satisfactory
conclusion for the shareholders of both of our companies.
"Very truly yours,
GRUPO MEXICO, S.A. de C.V.
By /s/ Daniel Tellechea Salido
______________________________
Daniel Tellechea Salido
Managing Director for Administration
and Finance and Alternate Director
By /s/ Genaro Guerrero Diaz Mercado
_________________________________
Genaro Guerrero Diaz Mercado
Treasurer"
The Board of Directors of ASARCO met on October 8, 1999 to consider
the revised proposal contained in Grupo MExico's letter. At the meeting,
the ASARCO Board of Directors considered, together with advicefrom its
financial and legal advisors, (i) the terms of Grupo MExico's revised
offer, (ii) ASARCO's rights and obligations under the Agreement and Plan of
Merger, dated as of October 5, 1999, among Phelps Dodge Corporation, AAV
Corporation and ASARCO (the "Merger Agreement"), and (iii) its fiduciary
duties to stockholders of ASARCO under applicable law. At the October 8,
1999 meeting, in accordance with the terms of the Merger Agreement, the
Board of Directors determined in good faith, after consultation with its
legal and financial advisors, that it was necessary in order to comply with
its fiduciary duties under applicable law (x) to modify its recommendation
of the Phelps Dodge Offer and Merger, and (y) if necessary, to furnish
information to Grupo MExico pursuant to a customary confidentiality
agreement and to participate in discussions or negotiations regarding the
Grupo MExico revised proposal. The Board has notified Phelps Dodge in
accordance with the terms of the Merger Agreement that it intends to take
these actions. A copy of this notice is filed as Exhibit 33 hereto and is
incorporated herein by reference.
In the afternoon on October 8, 1999, Douglas C. Yearley, Chairman,
President and Chief Executive Officer of Phelps Dodge, telephoned Mr.
McAllister to inform him that Phelps Dodge would not raise its offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY SUBJECT COMPANY.
Subsections (a) and (b) of Item 7 are hereby amended by adding the
following:
Except as set forth herein and in Item 4, no negotiation is being
undertaken or is underway by ASARCO in response to the Phelps Dodge Offer
that relates to or would result in (i) an extraordinary transaction, such
as a merger or reorganization involving ASARCO or any subsidiary thereof;
(ii) a purchase, sale or transfer of a material amount of assets by ASARCO
or any subsidiary thereof; (iii) a tender offer for or other acquisition of
securities by or of ASARCO; or (iv) any material change in the present
capitalization or dividend policy of ASARCO.
Except as set forth herein, there is no transaction, board resolution,
agreement in principle or signed contract in response to the Grupo MExico
Offer that relate to or would result in one or more of the events referred
to above.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 5. Letter from ASARCO to Phelps Dodge, dated October 8, 1999.
Exhibit 6. Press release of ASARCO, dated October 8, 1999.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
ASARCO INCORPORATED
By /s/ Francis R. McAllister
___________________________________
Name: Francis R. McAllister
Title: Chairman and
Dated: October 8, 1999
EXHIBIT INDEX
Exhibit 5. Letter from ASARCO to Phelps Dodge, dated October 8, 1999.
Exhibit 6. Press release of ASARCO, dated October 8, 1999.
[LETTERHEAD OF ASARCO INCORPORATED]
October 8, 1999
Douglas C. Yearley
Phelps Dodge Corporation
2600 North Central Avenue
Phoenix, Arizona 85004-3014
Re: Phelps Dodge/Asarco Merger Agreement
Dear Doug:
Reference is made to the Agreement and Plan of Merger, dated as
of October 5, 1999 (the "Merger Agreement"), among Phelps Dodge Corporation
("Phelps Dodge"), AAV Corporation and ASARCO Incorporated ("ASARCO").
Pursuant to Section 5.9(b) of the Merger Agreement, you are
hereby advised that the Board of Directors of ASARCO met on October 8, 1999
to consider the revised proposal from Grupo MExico, a copy of which we sent
to you yesterday. At the meeting, the ASARCO Board of Directors
considered, together with advice from its financial and legal advisors, (i)
the terms of Grupo MExico's revised offer, (ii) ASARCO's rights and
obligations under the Merger Agreement and (iii) its fiduciary duties to
stockholders of ASARCO under applicable law. At the October 8, 1999
meeting, in accordance with the terms of the Merger Agreement, the Board of
Directors determined in good faith, after consultation with its legal and
financial advisors, that it was necessary in order to comply with its
fiduciary duties under applicable law (x) to modify its recommendation of
the Phelps Dodge Offer and Merger, and (y) if necessary, to furnish
information to Grupo MExico pursuant to a customary confidentiality
agreement and to participate in discussions or negotiations regarding the
Grupo MExico revised proposal.
Sincerely,
Francis R. McAllister
cc: David W. Heleniak
Shearman & Sterling
Michael W. Blair
Debevoise & Plimpton
FOR IMMEDIATE RELEASE
ASARCO TO CONSIDER GRUPO MEXICO OFFER
NEW YORK, N.Y., OCTOBER 8, 1999 - ASARCO Incorporated (NYSE:AR) announced
that the Board of Directors of Asarco met to consider the revised proposal
contained in a letter from Grupo Mexico of October 7, 1999. In its revised
proposal, Grupo Mexico offered to acquire all of the outstanding shares of
Asarco common stock at a price of $29.50 per share in cash.
At the meeting, the Asarco Board of Directors considered, together with
advice from its financial and legal advisors, the terms of Grupo Mexico's
revised offer, Asarco's rights and obligations under the Phelps Dodge
merger agreement and its fiduciary duties to stockholders of Asarco under
applicable law. In accordance with the terms of its merger agreement with
Phelps Dodge, the Board of Directors determined in good faith, after
consultation with its legal and financial advisors, that it was necessary
in order to comply with its fiduciary duties under the applicable law to
modify its recommendation of the pending transaction with Phelps Dodge and,
if necessary, to furnish information to Grupo Mexico pursuant to a
customary confidentiality agreement and to participate in discussions or
negotiations regarding the Grupo Mexico revised proposal. The Board has
notified Phelps Dodge that it intends to participate in discussions with
Grupo Mexico concerning the proposal. Accordingly, the Asarco Board
recommends that stockholders not tender their shares in the Phelps Dodge
Exchange Offer at this time.
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