ConceptX
Mar 26th, 2007, 01:52 PM
Source: The Toronto Star (http://www.thestar.com/Business/article/196024)
Mar 26, 2007 01:27 PM (CHRIS SORENSEN from Business Reporter)
Shares of LionOre Mining International Ltd. (TSX: LIM) were up nearly 9 per cent this morning after Swiss mining giant Xstrata Plc, which last year bought Canada’s Falconbridge Ltd., made a friendly $4.6 billion takeover bid for the Toronto-headquartered nickel producer.
Investors pushed LionOre’s shares just over the $19 mark in apparent anticipation of a competing bid. Shares of LionOre, which has mining operations in Australia, Botswana and South Africa, closed at $17.49 on the Toronto Stock Exchange Friday.
While some investors criticized Xstrata for undervaluing LionOre -- Xstrata’s offer of $18.50 per LionOre share represents a modest 6 per cent premium over Friday’s closing price -- LionOre CEO Colin Steyn told reporters the deal was fair given his belief that world nickel prices are near their peak.
“Nickel prices are at unsustainable levels,” Steyn said during a press conference. “And if they were to remain there we would start to see value destruction in the stainless steel market, which would affect demand.”
LionOre, whose board is recommending shareholders accept Xstrata’s offer, earned $428.5 million last year and saw the value of its stock nearly triple during the same period.
Steyn told reporters that he doesn’t expect another bid to emerge, noting that most of the industry’s major players have already taken a look at the company.
Xstrata, the world’s fifth-largest mining company, said the deal will allow it to cement its status as a global nickel producer after purchasing Falconbridge for $24.8 billion last year.
*****Here we go! Canada is going to lose another company to foreign ownership.*****
Mar 26, 2007 01:27 PM (CHRIS SORENSEN from Business Reporter)
Shares of LionOre Mining International Ltd. (TSX: LIM) were up nearly 9 per cent this morning after Swiss mining giant Xstrata Plc, which last year bought Canada’s Falconbridge Ltd., made a friendly $4.6 billion takeover bid for the Toronto-headquartered nickel producer.
Investors pushed LionOre’s shares just over the $19 mark in apparent anticipation of a competing bid. Shares of LionOre, which has mining operations in Australia, Botswana and South Africa, closed at $17.49 on the Toronto Stock Exchange Friday.
While some investors criticized Xstrata for undervaluing LionOre -- Xstrata’s offer of $18.50 per LionOre share represents a modest 6 per cent premium over Friday’s closing price -- LionOre CEO Colin Steyn told reporters the deal was fair given his belief that world nickel prices are near their peak.
“Nickel prices are at unsustainable levels,” Steyn said during a press conference. “And if they were to remain there we would start to see value destruction in the stainless steel market, which would affect demand.”
LionOre, whose board is recommending shareholders accept Xstrata’s offer, earned $428.5 million last year and saw the value of its stock nearly triple during the same period.
Steyn told reporters that he doesn’t expect another bid to emerge, noting that most of the industry’s major players have already taken a look at the company.
Xstrata, the world’s fifth-largest mining company, said the deal will allow it to cement its status as a global nickel producer after purchasing Falconbridge for $24.8 billion last year.
*****Here we go! Canada is going to lose another company to foreign ownership.*****