Russia's Norilsk Nickel has won the battle for control of LionOre Mining International after Xstrata said it wouldn't increase its offer price for the Canadian/Australian nickel miner.
Xstrata told LionOre's board late Friday that it wasn't matching Norilsk's latest offer of $C6.8 billion ($A7.68 billion).
Norilsk bid $C27.50 a share on May 23 to top Xstrata's $C25-a-share offer of May 15. Norilsk originally bid $C21.50 an LIM share made on May 3 to top Xstrata's first offer at $C18.50 made on March 26.
Buying LionOre will give Norilsk mines in countries such as Australia, South Africa and Botswana, which will also help boost output which has stalled in its Russian operations.
Xstrata walks away from LionOre with a break fee of around $C305 million: a nice second prize and the second time it has fallen short in a major play in this part of the world.
Two years ago it was the under bidder to BHP Billion in the multi-billion dollar battle for WMC Resources. BHP won with a friendly offer of around $A9.8 billion and has been shown to have been a once in a lifetime deal by the surge in metal prices since, especially copper, nickel and uranium.
LionOre last week cut 2007 nickel production forecast by around three per cent, from 44,300 tonnes, to 43,000 tonnes of metal because of troubled mining conditions at a mine in Western Australia.
Xstrata paid $US18 billion last year to acquire Canadian nickel mining giant, Falconbridge, beating US miner, Phelps Dodge Corp.
Global nickel production is estimated to rise by around 5 per cent to about 1.48 million tons in 2007. Norilsk produced 224,000 tons in 2006.
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Meanwhile the battle for control of Queensland Cotton has something of the battle for control of LionOre about it with two determined bidders swapping higher offers.
Louis Dreyfus, the world's largest cotton producer, upped its bid late Friday to $5.85 a share, and won board endorsement.
Last Monday, QCH endorsed an offer from Olam International of Singapore of $5.65 a share. But the price for all shareholders would have been increased to $5.90 if it managed to secure at least three-quarters of the issued shares.
QCH chief Richard Haire said on Friday the board had endorsed the Louis Dreyfus offer because, with the French company determined to hold on to its existing 19.9 per cent stake, there was no realistic prospect of Olam achieving the 75.1 per cent threshold required to trigger the premium of 25c a share to take it to $5.95.
Watch for a statement from Olam today as the board was reported to be meeting on Friday and over the weekend.
"The revised offer of $5.85 is clearly superior to the second Olam offer of $5.65," QCH said Friday.
The offer values QCH at $165 million and is a huge 24.4 times QCH's drought-affected earnings of $6.75 million for the last financial year.
Olam started the takeover race with a bid of $4.75 a share on March 7, prompting a counter-offer from Louis Dreyfus which had argued with the QCH board about due diligence and seemed to miss the inside running that its shareholding would have normally given.
Olam returned with a higher offer last Monday and Dreyfus upped its price Friday and has seemingly won the battle with the QCH board's endorsement, and the reasoning given behind that endorsement.
Queensland Cotton shares last traded at $5.89. They were in a trading halt on Friday.
