News & Analysis » UK

Xstrata Terminates LoI Regarding Potential Acquisition Of Noranda Income Fund - Quick Facts

(RTTNews) - Xstrata Plc. (XTA.L) announced that it has terminated its non-binding letter of intent with respect to a potential acquisition of Noranda Income Fund, due to the Independent Committee of the fund was unwilling to accept the revised offer. Xstrata also said that its does not intend to proceed with the proposal.

On July 28, 2010, Noranda Income Fund and Xstrata Zinc announced that they had entered into a non-binding letter of intent with respect to a potential acquisition of the Fund by Xstrata for a cash consideration of C$3.40 per Priority Unit.

On August 30, 2010, Xstrata presented an improved proposal of C$3.90 per Priority Unit to the Fund, a premium of 53% to the closing price of the Units on the day prior to Xstrata's original proposal. The Independent Committee of the Fund was unwilling to accept the revised offer, having taken into account recent market trading activity in the Fund's Priority Units.

Xstrata currently owns an effective 25% voting and economic interest in NIF and manages the Fund's sole operating asset, the CEZinc processing facility in Qu?©bec. Xstrata also supplies CEZinc with its annual requirement of zinc concentrate through a contract which will expire in May 2017.