Grupo Mexico ordered to pay for its role in Minerva deal
* Court finds Southern Peru Copper overpaid for Minerva
* Orders Grupo Mexico to pay $1.26 bln to Southern Copper
Oct 17 (Reuters) – Grupo Mexico was ordered to pay $1.263 billion to Southern Copper Corp , which it controlled when Southern Copper overpaid for another Grupo Mexico company in 2004.
Grupo Mexico proposed in 2004 that Southern Peru Copper Corp, as it was then known, buy another Grupo Mexico mining company, Minerva Mexico. A deal was completed in 2005 for $3.75 billion, paid in Southern Copper stock.
Southern Copper shareholders sued, and Delaware’s Chancery Court agreed that Minerva was vastly overvalued in the deal.
The court determined Minerva was worth $2.43 billion and ordered Grupo Mexico to return the overpayment.
The judge, Leo Strine, said Grupo Mexico could pay the award by returning the necessary amount of Southern Peru Copper shares it received for Minerva.
Grupo Mexico said it was studying the decision, which was published on Friday.
“This is not a definitive decision, we are studying the best course of action and the possibility of appeal is one option,” said a company spokesman.
The spokesman said the ruling would not impact Grupo Mexico’s plans to merge Southern Copper with its Asarco mining business.
Strine ordered the parties to present a plan in the next 15 days for implementing the award.
Strine’s 106-page opinion blasted the work of Southern Copper’s special committee, set up to evaluate the Minerva deal, calling the eventual agreement a work of “commercial charity” toward Grupo Mexico.
Shares of Southern Copper were down 1.9 percent at $27.76 in morning trading on the New York Stock Exchange. Shares of Grupo Mexico were down 1.6 percent at 34.65 pesos on the Mexico City bourse.
