Norilsk Nickel increased its bid for LionOre Mining International Ltd. to C$6.3 billion (€4.315) today, raising the stakes in its battle with Xstrata Plc for the Canadian miner.
The Russian company's revised C$27.50 (€18.8417) per-share bid for LionOre was 10 per cent higher than a rival offer from Xstrata on May 15th, which had valued the world's 10th-largest nickel miner at C$6.2 billion (€4.28 billion), or C$25.00 (€17.130) per share.
"We believe this project to be important for our further development," Norilsk Chief Executive Denis Morozov said.
The 34-year-old executive said Norilsk had a commitment from Societe Generale and BNP Paribas to arrange a financing package for the deal.
"We are therefore ready to finance the deal with our own and borrowed funds."
Xstrata declined to comment.
Its offer last week included a C$305 million (€208.93 million) break fee that it would receive should LionOre accept a rival bid. Morozov said Norilsk's latest bid had been discounted to take this into account.
Norilsk, which has a market capitalisation of $37.1 billion (€25.41), mines a fifth of the world's nickel and more than half of its palladium, a precious metal used in jewellery and car exhausts.
It would become the world's first 300,000-tonne-plus producer of nickel should it acquire LionOre, whose 2007 forecast output of 40,000 tonnes is expected to double by 2012.
"This acquisition makes strategic sense. Norilsk is not a growth story, while LionOre is, and they want to capture that," said Deutsche UFG metals analyst Alexander Pukhayev.