Lonmin Rebuffs Miner Xstrata's $10Bln Takeover Bid

Anglo-Swiss mining group Xstrata Plc, which mines copper, nickel and coal across four continents, launched Wednesday an unsolicited $10 billion (about £5bn) takeover bid for platinum producer Lonmin Plc, a move that would take the mining giant one step more further to its planned goal to develop a significant platinum business and diversify its business. Describing the Anglo-African platinum miner Lonmin as the world's third largest platinum producer, the Zug, Switzerland-based international mining company Xstrsta, which is listed on both the London Stock Exchange and the SWX Swiss Exchange, said it will pay 33 pounds for each Lonmin share. The £33-per-share cash offer is 42% more than Lonmin's closing price of 23.19 pounds on the London stock exchange on Tuesday (August, 5). Xstrata, which has interests in copper, coal, ferrochrome, nickel, zinc, gold, cobalt, lead and silver, said it would fund the acquisition through a combination of cash and bank debt. The mining company, which already owns an 8.03% stake in Lonmin, said its offer is an opportunity for Lonmin shareholders to realize significant cash premium at a time of ongoing operational challenges. Meanwhile, the London-based Lonmin has rejected the mining company’s takeover bid, saying the bid undervalues the company’s assets. “This is an opportunistic and entirely unwelcome attempt to acquire Lonmin at a price which undervalues its unique assets,” said Lonmin. The company also advised shareholders not to take any action in regards to the offer. On the other hand, Xstrata said its proposed offer price “fully and fairly values Lonmin's asset base and growth pipeline, while recognizing the inherent risks, time and investment required to restore production to previous levels." Shares of Lonmin jumped almost 50% to £34.17 in London on the news, while shares in Xstrata rose 2% to 32.64 pounds ($63.79). Source: The Money Times