Tuesday, July 29, 2008

Teck-Cominco bids for Fording Canadian Coal Trust

Teck-Cominco bids for Fording Canadian Coal TrustTeck-Cominco B 3-month TSX chart

Teck Cominco Ltd. said Monday it will buy the assets Fording Canadian Coal Trust for a combination of cash and stock worth $14.1 billion.

Vancouver-based Teck Cominco said it will pay $12.4 billion US in cash and issue 36.9 million of its Class B subordinate voting shares.

Teck is picking up the royalties on Fording's 60 per cent stake in the Elk Valley Coal Partnership. Elk Valley Coal operates six mines in B.C. and Alberta, selling mainly to steel mills in Asia, Europe and North and South America.

Teck already holds a 40 per cent stake in Elk Valley Coal. Teck is also the managing partner of the partnership.

Teck CEO Don Lindsay said the acquisition is expected to immediately boost the company's earnings and cash flow.

Units of Fording rose almost eight per cent, or $6.55, to $90.35 on the TSX. Shares of Teck rose $2.44 to close at $42.85.



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