Sherritt wins Luscar Coal with improved bid

The takeover struggle for Luscar Coal Income Fund appears to be over.

Sherritt Coal Partnership a venture between Sherritt International Corp. and the Ontario Teachers' Pension Plan Board said Tuesday that the fund's trustees and management have accepted a sweetened bid from the partnership.

The new offer is for $4 cash or one restricted voting share of Sherritt International for each unit of the fund. Including the acquisition of Luscar's debt, the deal is worth about $1 billion.

The original offer was for $3.50 cash per unit or combination of $2.38 and just over a quarter of a Sherritt International share for each unit.

"We are very pleased that the Luscar trustees have recommended acceptance of our offer," said Ian W. Delaney, chairman of Sherritt Coal and Sherritt International.

"The offer provides an attractive cash price, and the share exchange option gives unitholders the opportunity to benefit from an investment in both the Luscar operations and those of Sherritt International," Delaney said.

The fund is an open ended trust invested in Luscar, a coal mining outfit that produces roughly 38 million tonnes per year from mines in western Canada.

If Luscar accepts another take-over bid, it will pay Sherritt Coal a $22-million break-up fee.

Shares of Sherritt International slipped 19 cents, finishing at $4.18 on Tuesday.