Xstrata, based in Zug, Switzerland, will pay C$18.50 a share for LionOre, it said yesterday in a statement, 5.8 percent more than the company's closing share price in Toronto on March 23. LionOre's stock rose 6.1 percent to 802.5 pence, or C$18.27, in London yesterday. Xstrata, led by Chief Executive Officer Mick Davis, is seeking to put itself among the world's top three nickel producers. The company bought Canada's Falconbridge Ltd. for $18 billion (about P111.6 billion) last September. Toronto-based LionOre has mines in Australia, where it's the country's third largest nickel miner, as well as Botswana and South Africa.
"Xstrata tends to surprise the market with their acquisitions, which have been perceived as ill-timed, and which then turn out to be smart," said Mark Pervan, head of research at Daiwa Securities SMBC in Melbourne. "They seem to call the trend better than others." Shares of Xstrata gained 26 pence, or 1 percent, to 2,604 pence as of 10:36hrs. in London yesterday. They have doubled in the past year.
