After failed Anglo American bid, Xstrata eyes Lonmin once again
07 Sep 2009
After its June proposed "merger of equals" with Anglo American being rejected by the Anglo board, (See: Anglo American rejects Xstrata's $68-billion deal) mining giant Xstrata is now planning to launch a renewed bid for the world's third-biggest platinum producer, Lonmin.
In August 2008, London-based Lonmin Plc, had rejected an unsolicited $10-billion takeover offer by Anglo-Swiss mining group Xstrata, saying that the 33-pound per share offer undervalued the company. (See: South Africa's Lonmin rejects Xstrata's $10 billion hostile bid)
Forced to withdraw the hostile bid last year after the credit markets dried up as it had planned to fund the acquisition from borrowings, Xstrata is already holding a 25-per cent stake in Lonmin, and under the takeover panel rules, it can make a fresh bid after 2 October 2009.
Xstrata's group's chief executive Mick Davis is learnt to have asked the company's financial advisers JP Morgan and Deutsche to conduct a feasibility study on a new bid for Lonmin.
Under the takeover panel rules, the Zug-based Swiss firm Xstrata, which is listed on the London and Swiss stock exchanges, will be allowed to make a new bid below the £33 a share it originally offered in August.
Lonmin's current market valuation is around £3 billion and any offer the Swiss miner will make, will have to have a premium above this for the Lonmin's board and shareholder's to even consider the offer.
