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LionOre to consider Norilsk Nickel's increased cash offer

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Canadian gold and nickel producer LionOre said Thursday it will review an increased offer by Russia's metals giant Norilsk Nickel to purchase its common stock at 27.5 Canadian dollars (US$25.32) per share.
MOSCOW, May 24 (RIA Novosti) - Canadian gold and nickel producer LionOre said Thursday it will review an increased offer by Russia's metals giant Norilsk Nickel to purchase its common stock at 27.5 Canadian dollars (US$25.32) per share.

Norilsk Nickel, the largest mining and metals company in Russia and one of the world's biggest producers of nickel, palladium, platinum and copper, raised its bid for the Canadian company May 23.

The new offer represents an increase of 6 Canadian dollars ($5.52) per share over Norilsk Nickel's previous bid of 21.50 Canadian dollars ($19.42) in cash for each LionOre share, and a premium of 10% over the 25 Canadian dollar ($23) price offered by Xstrata Plc. in its increased rival bid for LionOre, the metals giant earlier said in a statement.

"Assuming that all common shares are tendered, Norilsk Nickel's increased offer represents a total cash sum of approximately 6.8 billion Canadian dollars [$6.26 billion] and provides around 620 million Canadian dollars [$570.9] more cash to LionOre shareholders than the Xstrata offer," the statement said.

Norilsk Nickel offered in early May to buy all LionOre's issued and outstanding common stock, paying 21.50 Canadian dollars ($19.42) in cash per share. The offer represented a premium of about 16.2% over a rival bid by Xstrata, a global diversified mining group with headquarters in Switzerland.

LionOre said on May 8 that a 5.3 billion Canadian dollar ($4.8 billion) offer for all of its issued and outstanding common shares by Norilsk Nickel was superior to Xstrata's bid, but that the Swiss company could exercise its matching right and propose an offer increase.

Xstrata adjusted its offer last week, offering 25 Canadian dollars ($23) per share, an increase of 35.1% over its original offer and a premium of about 16% over the price of 21.50 Canadian dollars ($19.42) per share offered by Norilsk Nickel.

The Russian metals giant is seeking to acquire LionOre to boost metal output, expand the geography of its operations and implement "exciting projects," the company earlier said.

LionOre is a global nickel and gold producer with operations in Australia, Botswana and South Africa. In 2006, LionOre produced 34,094 metric tons of payable nickel and 155.203 ounces of gold.

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