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Lonmin and Platinum

CommissarJones
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Re: Lonmin and Platinum

#120887

Postby CommissarJones » February 27th, 2018, 8:37 pm

If this deal was unimpressive to begin with, it has really gone into the toilet in the last week.

Sibanye's annual results on Feb. 22 were poorly received, to say the least - the stock, the "currency" for this transaction, fell 16% that day and is now down 27% from the price before the takeover was announced (close of ZAR11.68 today versus ZAR16.11 on Dec. 13). That values Lonmin shares at about 62.5 pence each, against 100p at the time of the announcement, using the same GBP/ZAR exchange rate. The rand has strengthened against sterling since then, so the shares are worth 69p each at the current rate, which is slightly less gruesome.

The biggest Lonmin shareholder (with about 29%) is Public Investment Corp., which is owned by the South African government. However, PIC is also the second-largest Sibanye stockholder (owning about 11%), so it's not obvious to me that they have any particular motivation to push for a better deal here. One wonders what the likes of Majedie, Schroders, Legal & General and Ruffer (all on the Lonmin register) make of the situation.

CommissarJones
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Re: Lonmin and Platinum

#139267

Postby CommissarJones » May 15th, 2018, 9:20 pm

Liberum speculated last week that Sibanye's takeover of Lonmin might fall through because of the effect on Lonmin's finances of low platinum prices and the stronger rand. But in yesterday's interim results, Lonmin said it still expects the deal to complete in the second half of 2018. And now the UK competition regulator has decided to stick its oar into the situation as well.

The price action of the two stocks is not pretty. Sibanye has dropped almost 20% in May, and Lonmin is down about 15%.

GoSeigen
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Re: Lonmin and Platinum

#141376

Postby GoSeigen » May 25th, 2018, 9:47 pm

CommissarJones wrote:Liberum speculated last week that Sibanye's takeover of Lonmin might fall through because of the effect on Lonmin's finances of low platinum prices and the stronger rand. But in yesterday's interim results, Lonmin said it still expects the deal to complete in the second half of 2018. And now the UK competition regulator has decided to stick its oar into the situation as well.

The price action of the two stocks is not pretty. Sibanye has dropped almost 20% in May, and Lonmin is down about 15%.


Is this the time to grow big cahones or to patiently wait and see what happens? I have no idea TBH, waiting has been a good policy so far, but can't really believe there is no value in these assets.

Lonmin has p'ed away a LOT of value though to be fair...


GS


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