Falconbridge finding support for Inco deal

By Rachelle Younglai

NEW YORK (Reuters) - Falconbridge Ltd.'s FALlv.TO chief executive said on Tuesday that the company is finding support for Inco Ltd.'s N.TO takeover offer as it fends off a hostile bid from Swiss-based Xstrata Plc. (XTA.L: Quote, Profile, Research, Stock Buzz).

Speaking at the Reuters Global Mining and Steel Summit in New York, Derek Pannell said that shareholders were "very supportive."

Last week, Falconbridge reaffirmed its support for the friendly C$19 billion Inco offer and rejected the unsolicited C$20 billion bid from Xstrata Plc. Inco also reaffirmed its support for Falconbridge and rejected an unsolicited C$17.8 billion offer from Teck Cominco Ltd. TEKb.TO.

Since then, Inco said it is in talks with others on alternatives to Teck's bid. It did not identify the other parties and said it had entered into customary confidentiality agreements.

Pannell said he has not been involved in any discussions with Inco as it explores alternatives.

"Not sure if this will exactly lead anywhere," Pannell said. "I think it will involve us if they make some kind of deal. ... If (Inco's CEO) comes to us and says something that makes sense, I guess we'll listen."

Pannell said Inco has certain fiduciary duties and that the company was not violating the support agreement between Inco and Falconbridge.

Inco, Teck and Falconbridge have had informal talks about a three-way merger, but the three companies separately rejected the idea.  Continued...