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Norilsk Nickel board member says latest bid for LionOre 'too risky'

Norilsk Nickel board member says latest bid for LionOre 'too risky'

Soaring nickel prices have peaked, making OAO Norilsk Nickel's US$6.36 billion (euro4.73 billion) takeover bid for Canada's LionOre "too risky," a major shareholder and former general director of the Russian company said Thursday.
"LionOre is a good company, it could have a synergetic effect for Norilsk Nickel, but the price ... is too high," Mikhail Prokhorov said at a news conference to launch his new investment fund. "In my opinion the nickel market is at a peak. In the medium term my forecast is that the price of nickel will fall."
Norilsk Nickel, which produces a fifth of the world's nickel and half of its palladium, is in a bidding battle with Xstrata PLC for Canadian gold and nickel producer LionOre. Last week Norilsk raised its bid to US$6.36 billion (euro4.73 billion) in an illustration of the global scramble for acquisitions among resource companies.
Xstrata had previously sweetened its own offer to US$5.6 billion (euro4.17 billion).
Prokhorov, a core shareholder of Norilsk who was its general director until early April and still sits on its board, said that he voted in support of Norilsk's first bid. But he called the second "too risky."
Prokhorov resigned from Norilsk Nickel amid the reorganization of its holdings and structure as well as that of its parent company, ZAO Interros Holdings.
Interros announced in January that its chief executive, Vladimir Potanin, would acquire Prokhorov's 22 percent stake in Norilsk Nickel. On Thursday Prokhorov said that a decision on how the two billionaires would divide Interros' other assets would be taken by the end of the year. Prokhorov will manage his stakes in those companies through the new investment fund, Unexim.
Norilsk has made major forays overseas in recent years, acquiring U.S. miners Stillwater Mining Co. and nickel producer OM Group Inc.
If it wins its quest for LionOre Mining International Ltd., the company's global footprint will extend into Australia, Botswana and South Africa.


Updated : 2021-10-18 05:57 GMT+08:00