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Xstrata extends offer for LionOre
Toronto and Zug, 15 June 2007
Xstrata plc ("Xstrata") announces the extension of the expiry time of its all-cash offer to acquire all of the LionOre Mining International Ltd. ("LionOre") shares to midnight (Vancouver time) on 28 June 2007. Following Xstrata’s decision not to match the offer made by OJSC MMC Norilsk Nickel (“Norilsk”) to acquire all of the LionOre shares, LionOre terminated the support agreement between Xstrata and LionOre, paid Xstrata a cash termination payment of C$305 million and entered into a support agreement with Norilsk.
Certain other terms and conditions of Xstrata’s offer to acquire all of the LionOre shares (the “Offer”) have also been amended to bring the conditions contained in the Offer in line with those contained in the offer made by Norilsk and in view of the termination of Xstrata’s support agreement with LionOre. These include reducing the minimum tender condition to 50.01% from 66 2/3%. Xstrata expects to mail a formal notice of variation and change to LionOre shareholders on 18 June 2007.
LionOre shareholders with questions or requests for copies of documents relating to the Offer should contact Kingsdale Shareholder Services Inc. at 1-866-879-7650. Banks and brokers should call at +1-416-867-2272.
Ends
Xstrata contacts
Ian Hamilton
Telephone + 1 416-775-1523
Mobile + 1 416 902 0986
Email ihamilton@xstratanickel.ca
Claire Divver
Telephone +44 20 7968 2871
Mobile +44 7785 964 340
Email cdivver@xstrata.com
About Xstrata
Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata’s businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with recycling facilities, additional exposures to gold, cobalt, lead and silver and a suite of global technology products, many of which are industry leaders. Xstrata Group's operations and projects span 18 countries: Argentina, Australia, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, New Caledonia, Norway, Papua New Guinea, Peru, the Philippines, South Africa, Spain, Tanzania, the USA and the UK. Xstrata employs approximately 43,000 people, including contractors.
Xstrata Nickel, headquartered in Toronto, Canada, is one of Xstrata Group’s global commodity businesses, comprising five mines and processing facilities in Ontario and Quebec, Canada; a ferronickel mine and processing facility in Bonao, Dominican Republic; and a refinery in Kristiansand, Norway. Xstrata Nickel has a significant portfolio of growth projects, including Nickel Rim South in Canada, Kabanga in Tanzania, and Koniambo in New Caledonia. Xstrata Nickel is the world’s fourth largest nickel producer, with annual managed production of more than 110,000 tonnes of refined nickel.
Legal Notice
The Offer is being made by Xstrata Canada Acquisition Corp. (the “Offeror”), a wholly-owned indirect subsidiary of Xstrata.
This announcement is for informational purposes only and does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security. The Offer (as the same may be varied or extended in accordance with applicable law) is being made exclusively by means of, and subject to the terms and conditions set out in, the offer and offering circular dated 5 April 2007, as varied, amended and supplemented by the notice of variation dated 15 May 2007, the notice of extension dated 28 May 2007 and the notice of extension dated 5 June 2007, each delivered to LionOre and filed with Canadian provincial securities regulators and mailed to LionOre shareholders by Xstrata and the Offeror, and as further amended by the notice of variation and change that Xstrata and the Offeror will deliver to LionOre, file with Canadian provincial securities regulators and mail to LionOre shareholders. LionOre shareholders should read these materials carefully because they contain important information, including the terms and conditions of the Offer.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions.
No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Xstrata ordinary share for the current or future financial years would necessarily match or exceed the historical published earnings per Xstrata ordinary share.
Neither the content of Xstrata’s website or any other website nor the content of any website accessible from hyperlinks on Xstrata’s website or any other website is incorporated into, or forms part of, this announcement.
Recent Developments in connection with the Offer
On 6 June 2007, Norilsk announced that it had received notice from the Swiss Competition Commission that Norilsk's proposed acquisition of control of LionOre had been approved under the applicable Swiss merger control laws and would not be subject to any further competition reviews in Switzerland.
On 7 June 2007, Xstrata announced that it had received approval from the South African Competition Tribunal for its proposed acquisition of LionOre and, therefore, no further regulatory approvals would be required in respect of the Offer.
Also on 7 June 2007, LionOre notified Xstrata that it had terminated the Support Agreement effective immediately upon payment to the Offeror of the termination payment of Cdn.$305 million. The Offeror received the termination payment in the afternoon on 7 June 2007. Shortly thereafter, LionOre announced that the Support Agreement had been terminated, that the termination payment had been paid to the Offeror and that the locked-up shareholders who had previously deposited their LionOre shares to the Offer would be free to withdraw such shares from the Offer. LionOre also announced that the LionOre Board of Directors will unanimously recommend that LionOre shareholders accept the offer from Norilsk and deposit their LionOre shares under the offer from Norilsk.
On 8 June 2007, LionOre issued a Notice of Change to Directors' Circular stating that the Board of Directors of LionOre unanimously recommend that LionOre shareholders accept the offer from Norilsk and deposit their shares to the offer from Norilsk and that LionOre shareholders reject the Offer and not deposit their LionOre shares to the Offer. The Notice of Change to Directors' Circular also states that the proposed support agreement with Norilsk would be on substantially similar terms as the Support Agreement but would contain no "break fee".
Also on 8 June 2007, LionOre announced that its delisting from the Australian Securities Exchange (the "ASX") had taken effect at the close of ASX trading on 5 June 2007.
On 15 June 2007, Norilsk and LionOre announced that they had entered into a support agreement in connection with the offer from Norilsk providing for, among other things, a non-solicitation covenant on the part of LionOre, subject to customary "fiduciary out" provisions and a right in favour of Norilsk to match any superior proposal. Also on 15 June 2007, Norilsk filed a notice of extension extending the expiry time of its offer to 8:00 p.m. (Toronto time) 28 June 2007 and disclosed that (i) the Minister responsible for the Investment Canada Act delivered notice to Norilsk that the Minister was extending the period for review of the Norilsk offer for the prescribed period of up to an additional 30 days and (ii) the period for review of the Norilsk offer by the Norwegian Competition Authority expired without an order from such authority to submit further information and, accordingly, the Norilsk offer was deemed to be approved.
For the purposes of and in accordance with the UK Listing Rules of the Financial Services Authority, Xstrata confirms that, except as disclosed in this announcement and/or as disclosed since 26 March 2007 by Xstrata via a Regulatory Information Service approved by the UK Financial Services Authority there has been no significant change affecting any matter contained in the announcement issued by Xstrata on 26 March 2007 in connection with the Offer (the “26 March 2007 Announcement”) and no other significant new matter has arisen which would have been required to be mentioned in the 26 March 2007 Announcement if it had arisen at the time of preparation of the 26 March 2007 Announcement.
Forward-Looking Statements
This announcement contains statements which are, or may be deemed to be, "forward looking statements" which are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.
Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xstrata to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Important factors that could cause actual results, performance or achievements of Xstrata to differ materially from the expectations of Xstrata include, among other things, general business and economic conditions globally, commodity price volatility, industry trends, competition, changes in government and other regulation, including in relation to the environment, health and safety and taxation, labor relations and work stoppages, changes in political and economic stability, the failure to meet certain conditions of the Offer, the inability to successfully integrate LionOre's operations and programs with those of Xstrata, incurring and/or experiencing unanticipated costs and/or delays or difficulties relating to integration of LionOre, disruptions in business operations due to reorganization activities and interest rate and currency fluctuations. Such forward-looking statements should therefore be construed in light of such factors.
Neither Xstrata nor the Offeror, nor any of their associates or respective directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements.
Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Services Authority), Xstrata is not under any obligation and Xstrata expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.