Asarco picks highest bidder, not Grupo Mexico

By Emily Chasan

NEW YORK, May 29 (Reuters) - Grupo Mexico SAB de CV (GMEXICOB.MX: Quote, Profile, Research, Stock Buzz), one of the world's top copper producers, could lose its bankrupt U.S. subsidiary Asarco LLC, after a court filing showed that Asarco has selected a different lead bidder for its asset auction.

Following an initial auction last week, Asarco has picked an undisclosed bidder and has not officially disclosed the amount of that bid, a lawyer for the company, Jack Kinzie, said on Thursday.

However, a Grupo Mexico unit that has been fighting to keep the company said in a court filing this week that the winning bid was made by someone else, amounted to $2.6 billion and was subject to a $50 million break-up fee.

That initial bid would be subject to future higher bids, Kinzie said.

Asarco, which owns three copper mines in Arizona, filed for bankruptcy protection in 2005 after it was sued for $1 billion over environmental cleanup and asbestos claims. It wants to sell off its assets to emerge from bankruptcy.

Grupo Mexico has submitted its own reorganization and asset sale plan to Asarco's board, under which it says the company's bondholders will be fully paid. However, it has been complaining that it has been denied information to properly value the company. (Editing by Gary Hill)