22 May 2019

South Africa: Sibanye-Stillwater CEO Explains Why He Has Drawn a Line in the Sand On Lonmin Deal


Sibanye-Stillwater is in the final stretch of its bid to acquire troubled platinum producer Lonmin. There has been speculation that some shareholders may now hold out for a better deal because of changing market conditions. Sibanye CEO Neal Froneman outlines why he is not budging.

The end is finally in sight for Sibanye-Stillwater's takeover of platinum producer Lonmin, with shareholders from both companies set to vote next week on the deal. One of the final hurdles was cleared last week when the Competition Appeal Court of South Africa dismissed a bid by the Association of Mineworkers and Construction Union to thwart the transaction.

Yet question marks have hung in the air, with Bloomberg last week citing an unnamed official from South Africa's Public Investment Corporation -- which has R2.1-trillion in assets and a 30% stake in Lonmin, enough to torpedo the merger -- as saying that there were concerns that the value of the all-share deal has eroded in Sibanye's favour.

This is because Sibanye's share price has fallen 26% since the deal was unveiled in December 2017, while prices for platinum group metals (PGMs) have risen, giving a new lustre to Lonmin. Analysts have since been quoted in the...

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