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Xstrata bids $5bn for LionOre Mining Int

ANGLO-SWISS mining giant Xstrata plc has launched a friendly $5 billion cash offer for Canada-based nickel miner LionOre Mining International, which has substantial operations in Western Australia. LionOre is one of the world’s top 10 nickel producers and has benefited from the soaring price of nickel in recent years. Xstrata said the deal would consolidate its position as a top-tier nickel producer and create value for Xstrata Nickel through vertical integration and combination of complementary businesses. “With LionOre, we unleash opportunities to create value through additional production, strong synergy potential, access to new markets and increased opportunities for growth, and through optimisation of technology,” Xstrata Nickel CEO Ian Pearce said in a statement. The deal was unanimously recommended by LionOre’s board. The offer price was just 5.8 per cent above LionOre’s latest trading price but 16.5 per cent above the 30-day average share price. LionOre president Colin Steyn said the takeover offer positioned its operations and employees as part of a growing, successful global nickel producer. “This is an extremely attractive opportunity for our shareholders to lock in the substantial growth in value they have seen recently in their investment,” Mr Steyn added. LionOre’s Australian nickel mines include the Lake Johnston and Black Swan operations in the northern Goldfields. It also operates the Thunderbox gold project and has been evaluating development of the giant Honeymoon Well nickel deposit. Xstrata said some LionOre shareholders, including directors, had entered into lock-up agreements, agreeing to deposit all of their LionOre shares, representing around 19 per cent of the stock.

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