Lonmin holds talks to find Xstrata alternative

Lonmin has been holding secret talks to find an alternative to the proposed takeover by Xstrata, it has been revealed.

The company is looking into the possibility of securing a merger with two rival groups in order to create the world's second-biggest platinum firm.

The link-up with Aquarius Platinum and Mvelaphanda Group, the South African conglomerate, is designed to challenge the position of Anglo Platinum as the top global producer of platinum.

Although the terms of the deal are yet to be concluded, it is thought that Lonmin shareholders would receive an offer worth £38 per share, compared to Xstrata's £5.6 billion bid, which valued each share at around £33.

However, Mvelaphanda has responded today (September 8th) by denying that talks have taken place, with Executive Commercial Manager James Wellsted saying: "At the moment we haven't had discussions with Aquarius about anything like that.

"There have been discussions with most companies in the sector, everybody's looking about how to unlock value, but as to specific transactions with Aquarius or Lonmin, we haven't had that level of discussions."

Meanwhile, it has been suggested that Lonmin would fare better under the stewardship of Xstrata's CEO Mick Davis, rather than current CEO Brad Mills, who last week dismissed the former's offer as "wholly unacceptable".

The pair joined forces to help turn BHP Billiton into the world's largest mining company, but Ian Henderson, who manages $7 billion in natural-resource assets, including Xstrata, at JP Morgan Chase and Co, said Mr Davis would be the superior choice for investors.

He said: "Xstrata has operated the assets they have acquired very well by empowering management to do whatever is necessary.

"Lonmin has had such constant and recurring problems that it is debatable whether the management has been as proactive as it should have been.''



Source:

Lonmin in secret talks to evade Xstrata (07/09/08)
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/09/07/cnlonmin107.xml

Mvela Resources says no talks with Aquarius, Lonmin (08/09/08)
http://africa.reuters.com/business/news/usnBAN831880.html

Lonmin's Investors Would Have Fared Better With Xstrata's Davis (08/09/08)
http://www.bloomberg.com/apps/news?pid=20601085&sid=a485husBwFZo&refer=europe