London, England — MININGREVIEW.COM — 07 August 2008 – The world’s third-biggest platinum producer, Lonmin plc, says the unsolicited, pre-conditional US$10 billion (R75 billion) offer for the company announced yesterday by Xstrata is wholly inadequate, and strongly advises shareholders to take no action in respect of the pre-conditional offer, and to reject the approach.
In a statement released here this morning, the Lonmin board described the offer as opportunistic and an entirely unwelcome attempt to acquire Lonmin at a price which failed to adequately value the company’s business. The price proposed was also a discount to the price at which Lonmin shares had been trading as recently as 30 June 2008.
Yesterday Swiss-based Xstrata announced a proposed cash offer of £33.00 for each Lonmin share, valuing the company’s issued share capital at approximately £5 billion ($10 billion or R75 billion). The proposed offer represented a premium of 42% to Lonmin’s share price of £23.19 as at the close of business on Tuesday. So far Xstrata has acquired 16,706,483 Lonmin shares, which represents approximately 10.68% of the issued share capital of the company.
Commenting on the offer, Lonmin chairman Sir John Craven said: “This is an opportunistic move by Xstrata which attempts to capitalise on the current volatility in financial and metal markets. Lonmin will contest this approach vigorously. It undervalues Lonmin’s unique business and fails to deliver appropriate value for the company’s shareholders,” he insisted.
Lonmin’s operations and growth projects – located in the Bushveld complex which accounts for approximately 77% of global platinum supply – are fully integrated from mine to market, and benefit from a substantial resource base with a published life of mine in excess of 30 years and further growth potential.