The party continues. Faced with an agreed Xstrata bid for Lionore, Norilsk Nickel raised its game and its offer for the Canadian miner on Wednesday, announcing a revised offer of C$27.50 per share.
This represents an increase of C$6 per share over Norilsk Nickel’s previous offer of C$21.50, and a premium of 10 per cent over the C$25 price per share offered by Xstrata. Norilsk Nickel’s increased offer represents a total cash consideration of approximately C$6.8bn. Norilsk was at pains to point out that this provides around C$620m more cash to LionOre shareholders than the Xstrata offer.
So, the recriminations continue. Norilsk came out fighting when Xstrata raised its own offer last week, complaining at the “unreasonably high break fee payable to Xstrata of approximately 4.9 per cent of the bid’s value”. Wednesday’s raise from Norilsk “has been discounted to take into account the additional costs arising from the excessive Cdn$305m break fee payable to Xstrata. This break fee has compromised a fair bidding process, and value, which should have been delivered to LionOre shareholders, instead may go to Xstrata.”
Well, we’re not all friends yet.
However, the move was a popular one among the Norilsk board members, with 8 voting for and just one against, reports Reuters, citing a report from Russian newspaper Vedomosti. That one dissenting voter, however, was the joint owner, billionaire Mikhail Prokhorov, who is selling out to partner Vladimir Potanin.