Xstrata Launches $9.8 Billion Bid for Lonmin

Aug. 6, 2008
Lonmin says bid unwelcome

Swiss mining company Xstrata sought to expand its global reach with a 6.0-billion-euro (US$9.8 billion) bid for British platinum producer Lonmin termed "opportunistic and unwelcome" by its target.

Xstrata, which has interests in copper, coal, ferrochrome, nickel, zinc, gold, cobalt, lead and silver, and is listed on both the London and Swiss stock exchanges offered 33 pounds ($65) a share. That amounted to 42% more than its closing price of 23.19 pounds on the London stock exchange on August 5, said Xstrata.

Xstrata already has an 8.03% stake in Lonmin, but the British company rejected the bid saying it had undervalued its business. "This is an opportunistic and entirely unwelcome attempt to acquire Lonmin at a price which undervalues its unique assets," said Lonmin.

Xstrata said it was "uniquely positioned" to boost Lonmin's main operations in the Bushveld complex in South Africa due to its own business in the country such as platinum mining, smelting and refining. "Lonmin's operations have consistently underperformed its own forecasts on expected platinum sales and have been subject to a declining sales and production profile at a time of robust prices," the company said.

Xstrata earlier this year launched a 426-million-Australian-dollar (US$398 million) bid for Australian miner Indophil Resources NL, and recently bought another Australian group Jubilee Mines for 3.1 billion Australian dollars.

Copyright Agence France-Presse, 2008

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