On June 29, 2007, the MMC Norilsk Nickel Group announced that approximately 90 per cent of the outstanding common shares of LionOre Mining International Ltd. had been tendered to Norilsk Nickel in response to its takeover bid. The tendered shares were acquired by Norilsk Nickel in the first week of July in the largest-ever foreign acquisition by a Russian company. Headquartered in Moscow, Norilsk Nickel is the biggest mining and metals company in Russia and is one of the world's largest producers of nickel, palladium, platinum and copper, with a market capitalization of approximately $40 billion. LionOre is a Canadian-incorporated and Toronto Stock Exchange-listed nickel producer operated largely out of London, with mines in Australia, South Africa and Botswana.
On May 3, 2007, Norilsk Nickel made an initial unsolicited offer for all the issued and outstanding common shares of LionOre at a price of $21.50 in cash per share, for a total cash consideration of $5.3 billion. Norilsk Nickel's initial offer was in response to the prior offer of Xstrata plc (of Zug, Switzerland) announced on March 23, which had valued LionOre at $18.50 per common share, or $4.6 billion in totals. Norilsk Nickel's initial offer represented a premium of approximately 16.2 per cent over the Xstrata offer. Xstrata then increased its offer from $18.50 to $25.00 in cash per LionOre common share ($6.2 billion in total) on May 15, 2007, and on May 23, 2007, Norilsk Nickel increased its offer to $27.50 per LionOre common share ($6.8 billion in total), 10 per cent more than Xstrata's offer of $25.00 per share.
Following Xstrata's decision not to match Norilsk Nickel's offer, LionOre terminated its support agreement with Xstrata and paid Xstrata a cash termination “break fee” of $305 million. On June 24, 2007, LionOre entered into a support agreement with Norilsk Nickel, recommending that its shareholders accept Norilsk Nickel's offer.
Norilsk Nickel was represented in-house by its international general counsel, Andrey Zhupanov. Norilsk Nickel's external counsel was Hogan and Hartson with a team led by Todd Schafer and including John Basnage, Lex Eley, Alex Johnson, Kimberly Reed, Caryn Groce, Sumathi Subbiah and Yulia Yarnykh (corporate/M&A); Colin Craik, Katie Gill and Barbara Morfopolous (finance); Jonathan Ivinson, Ilya Rybalkin and Rebecca Armour (tax); Catriona Hatton, Wim Nauwelaerts and Matthew Giles (competition). Goodmans LLP acted as Canadian counsel, with a team including Stephen Halperin, Robert Vaux, Paolo Berard and David Nathanson (corporate/M&A); Carrie Smit, Alan Bowman and Jarrett Freeman (tax); Joel Schachter (foreign investment regulation); Richard Annan (competition); Jana Steele (pensions); and Scott Bell (legal research). Clayton Utz acted as Australian counsel, with a team including Susan O'Rourke, Michael Parshall, Simon Brady and Jacqueline Christie (corporate/M&A); Linda Evans and Bruce Lloyd (competition); David Landy (regulatory); Brad Wylynko (environment); Graeme Gurney (securities); and Paul Humphreys and John Loxton (tax). Webber Wentzel Bowens acted as South African counsel, with a team including Stephen Meltzer, Annabel Parry, Sam Gumede, Meluleki Nzimande and Jacqui Harvey (corporate); Anton Roets (competition); and Manus Booysen (mining). Collins Newman & Co. acted as Botswana counsel, with a team including Rizwan Desai, Larry Khupe and Bokani Machinya. Luostarinen Mettala Raikkonen acted as Finnish counsel, with a team including Keijo Räikkönen, Marjo Ojala and Marika Aho-Nissinen (competition).
The lenders were represented by Clifford Chance with a team including Jim MacHale, Victoria Bortkevicha, Annabel Johnson and Sasha McFarquhar in London and Logan Wright, Peter Randall and Evgeniya Lozovaya in Moscow; and in Canada by Osler, Hoskin & Harcourt LLP, with a team including Michael Matheson (finance) and Don Gilchrist (corporate). Acquisition financing was provided by BNP Paribas and Société Générale.
LionOre Mining International Ltd. was represented by its general counsel, Mark Rodda, and by McCarthy Tétrault LLP with a team led by Richard Miner and Graham Gow and including Oliver Borgers and Jeanne Pratt (competition); Brian Graves, Ian Michael and Joan Beck (business); and Jerald Wortsman and Ron Choudhury (tax).