Reuters reported that a shareholder of Southern Copper Corporation has sued to block a proposed merger with Asarco claiming they are being shortchanged by Grupo Mexico.

In a complaint filed on Monday in Delaware's Chancery Court against Southern's board, the Oklahoma Firefighters Pension & Retirement System said that the proposed transaction grossly overvalued Asarco at USD 5.9 billion.

The firefighters also protested that Grupo Mexico, which owns 80% of Southern, is not seeking approval of minority shareholders. The complaint seeks class action status.

Grupo Mexico said recently that it would combine its Arizona based Asarco business with Southern's Latin American mining operation to cut costs. It also said Southern's shareholders would benefit by gaining exposure to Asarco's growth potential.

The lawsuit asks the court to block the proposed Southern Asarco transaction unless Southern sets up an independent committee to negotiate on behalf of minority shareholders and put the deal to a vote of minority shareholders.

Mr Rodrigo Heredia an analyst who covers Grupo Mexico at IXE brokerage in Mexico said that it was unclear if one shareholder could block the merger plan. He said that long term benefits could come to shareholders if Asarco makes new copper discoveries although there may be some dispute on the initial valuation of the company.

(Sourced from Reuters)