Xstrata offer 'unwelcome'

Robert Laing

Robert Laing

Lonmin's share price opened nearly 50percent higher yesterday morning and went on to hit an intraday peak of R504,40 after Swiss mining group Xstrata made an offer to buy all the platinum miner's shares off the London and Johannesburg stock exchanges for £33 (about R478,50) each.

Lonmin's board advised shareholders to reject the offer, saying: "This is an opportunistic and entirely unwelcome attempt to acquire Lonmin at a price which undervalues its unique assets."

Though Xstrata is offering a 44percent premium on Tuesday's closing price of R332, the offer is well under the R565 peak Lonmin hit in February.

Xstrata's £33 offer values Lonmin at about R77billion.

If the bid succeeds, it will mark Xstrata's second South African platinum acquisition following its buyout of Eland Platinum a year ago.