SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
SCHEDULE 14D-9/A*
(AMENDMENT NO. 2)
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. 2 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, as amended
(the "Schedule 14D-9"), relates to a written proposal to acquire all of the
outstanding shares of ASARCO Common Stock which is described in a Tender
Offer Statement on Schedule 14D-1 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:
During the week of October 11, 1999 representatives of Grupo Mexico's
legal advisory team and representatives of ASARCO's legal advisory team
discussed Grupo Mexico's revisions to the form of merger agreement proposed
by ASARCO. On October 14, 1999, both Grupo Mexico and Phelps Dodge were
notified that the ASARCO Board of Directors was meeting early the following
morning to consider the terms of both bidders' offers. Late in the evening
on October 14, 1999, Grupo Mexico delivered to ASARCO the following written
proposal to acquire all of the outstanding shares of ASARCO Common Stock at
$29.75 per share in cash (the "Grupo Mexico $29.75 Per Share Transaction"):
"October 14, 1999
"BY HAND
"Board of Directors of ASARCO Incorporated
c/o J. Michael Schell, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
"Ladies and Gentlemen:
"In accordance with the procedures communicated to us by
ASARCO's legal advisors, we are pleased to submit the proposal of
Grupo Mexico, through our wholly-owned subsidiary, ASMEX
Corporation, to acquire all of the outstanding common stock of
ASARCO at a price of $29.50 per share in cash.
"However, Grupo Mexico is willing to increase the price per
share to $29.75 in the event (i) ASARCO agrees to increase the
"Termination Fee" indicated in the enclosed form of merger
agreement to $40 million and (ii) ASARCO delivers notice to
Phelps Dodge pursuant to your existing merger agreement that it
is prepared to execute the merger agreement with Grupo Mexico
exactly in the form accompanying this letter (except for the
changes referred to in clause (i) above).
"This proposal, in the event you determine to proceed with
Grupo Mexico's proposed transaction at your Board meeting
tomorrow and so notify Phelps Dodge tomorrow pursuant to your
existing merger agreement, will remain outstanding until 5:00
p.m., New York time, on October 23, 1999. Grupo Mexico is
prepared to enter into the enclosed form of merger agreement.
"Grupo Mexico looks forward to receiving a prompt and
favorable response to its proposal so that ASARCO and Grupo
Mexico can proceed to finalize this transaction.
Very truly yours,
/s/ Daniel Tellechea Salido
Grupo Mexico, S.A. de C.V.
By Daniel Tellechea Salido
Enclosure"
The Board of Directors of ASARCO met early in the morning of Friday,
October 15, 1999 and, following discussions with management and their legal
and financial advisors, authorized ASARCO's management to notify Phelps
Dodge, in accordance with the terms of the Phelps Dodge Merger Agreement,
that ASARCO is prepared to accept the Grupo Mexico $29.75 Per Share
Transaction and that it intends to terminate the Phelps Dodge Merger
Agreement at or after 9 a.m. on Saturday, October 23, 1999. A copy of this
notice to Phelps Dodge is attached hereto as Exhibit 5 and is incorporated
herein by reference. ASARCO also issued a press release on October 15,
1999 announcing the Board's determination, a copy of which is attached
hereto as Exhibit 6 and is incorporated herein by reference.
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 in Item 4, no negotiation is being undertaken or
is underway by ASARCO in response to the Grupo Mexico $29.75 Per Share
Transaction 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
$29.75 Per Share Transaction that relates to or would result in one or more
of the events referred to above.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 5. ASARCO's October 15, 1999 written notification to Phelps
Dodge of ASARCO's intention to accept the Grupo Mexico
$29.75 Per Share Transaction and to terminate the Phelps
Dodge Merger Agreement.
Exhibit 6. ASARCO October 15, 1999 press release.
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 Chief Executive Officer
Dated: October 15, 1999
EXHIBIT INDEX
Exhibit 5. ASARCO's October 15, 1999 written notification to Phelps
Dodge of ASARCO's intention to accept the Grupo Mexico
$29.75 Per Share Transaction and to terminate the Phelps
Dodge Merger Agreement.
Exhibit 6. ASARCO October 15, 1999 press release.
Exhibit 5
[LETTERHEAD OF ASARCO INCORPORATED]
October 15, 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 15,
1999 to consider the revised proposal from Grupo Mexico, the terms and
conditions of which are set forth in the attached letter and accompanying
proposed form of merger agreement. 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 proposal, (ii) ASARCO's
rights and obligations under the Merger Agreement and (iii) its fiduciary
duties to stockholders of ASARCO under applicable law. 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,
unless circumstances change, it was necessary in order to comply with its
fiduciary duties under applicable law to terminate the Merger Agreement.
Accordingly, you are hereby advised that ASARCO is prepared to
accept the revised Grupo Mexico proposal and that ASARCO intends to
terminate the Merger Agreement, in accordance with its terms, at or after
9:00 A.M. on Saturday, October 23, 1999.
Sincerely,
/s/ Francis R. McAllister
Francis R. McAllister
cc: David W. Heleniak
Shearman & Sterling
Michael W. Blair
Debevoise & Plimpton
Exhibit 6
ASARCO NEWS
FOR IMMEDIATE RELEASE
ASARCO NOTIFIES PHELPS DODGE
OF INTENTION TO ACCEPT NEW
GRUPO MEXICO $29.75 PER SHARE OFFER
NEW YORK, N.Y., OCTOBER 15, 1999 -- ASARCO Incorporated (NYSE:AR) announced
today that its Board of Directors met to consider the terms and conditions
of a newly increased $29.75 per share cash merger proposal from Grupo
Mexico, S.A. de C.V. The transaction contemplated by the proposed merger
agreement would be a $29.75 per share cash tender offer for all of the
outstanding shares of Asarco common stock, followed by a merger.
At the meeting, the Board of Directors authorized Asarco's management to
notify Phelps Dodge Corporation (NYSE:PD), in accordance with the terms of
Asarco's current merger agreement with Phelps Dodge, that Asarco is
prepared to accept the Grupo Mexico proposal and that it intends to
terminate the merger agreement at or after 9 a.m. on Saturday, October 23,
1999.
# # #
FOR FURTHER INFORMATION: Jerry W. Cooper (212) 510-1810 (212) 510-1835
(FAX) Donald M. Noyes (212) 510-1813 Corporate Communications Department,
ASARCO Incorporated, 180 Maiden Lane, N.Y. 10038-4991
