Norilsk Wins Biddingfor LionOre Mining MOVERS MARKETPLACE By Bloomberg

By Brett Foley

Norilsk Nickel was cleared to buy LionOre Mining International of Toronto for 6.8 billion Canadian dollars after Xstrata said it would not increase its offer. Xstrata, a Swiss company, said Friday that it had notified LionOre’s board that it would not match Norilsk’s latest offer, worth $6.4 billion.

Norilsk, based in Moscow, bid 27.50 dollars a share late last month to trump Xstrata’s 25-dollar-a-share offer, 28 percent more than Norilsk’s original bid of 21.50 made on May 3. Xstrata’s chief executive, Mick Davis, opened the bidding with an offer of 18.50 dollars in March.

Buying LionOre will give Norilsk access to mines in such countries as Australia, South Africa and Botswana. It will also help the Russian company, the world’s biggest nickel producer, compensate for stalling production growth at home, where its output rose less than 0.5 percent last year and was unchanged in 2005.

Nickel is the best-performing metal this year on the London Metal Exchange, more than doubling in price in the past year on rising Chinese demand for the metal, an ingredient used in stainless steel.

Buying LionOre would have made Xstrata the third-largest nickel producer, after Norilsk and Vale do Rio Doce of Brazil.

Claire Divver, a London-based spokeswoman for Xstrata, declined to comment further.

It is the second time in two years Xstrata has walked away from an acquisition. Xstrata lost out in its pursuit of WMC Resources of Australia in May 2005, after BHP Billiton, the world’s largest mining company, made a friendly $8.2 billion offer.

Xstrata paid $18 billion last year to acquire Falconbridge of Canada scuttling an alternative proposal from Phelps Dodge.

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