Lonmin shares shoot up by 25 percent on takeover speculations |
|
|
|
Published
:
Mon, 20 Feb 2006 02:10
|
LONDON - Lonmin PLC has confirmed that it is a potential bid target and is currently in talks that could lead to being taken over. The Anglo-African platinum mining firm however refused to divulge the identity of the bidder.
"Lonmin notes the recent rise in its share price and is announcing that it has had preliminary discussions which may or may not lead to an offer for the company," the company said in a statement. "It is stressed that these discussions are at a very preliminary stage and there is no certainty that any offer will be forthcoming."
It has since been revealed that the interested party is the South African gold-mining group, Gold Fields, according to unnamed sources quoted by the Financial Times on ft.com. The Sunday Times reports that the approach for Lonmin could very well turn out to be an expensive affair with companies like Rio Tinto, BHP Billiton, Falconbridge, Russian company Norilsk Nickel and Xstrata considering tabling separate bids for the world's third-largest platinum mining company.
Norilsk Nickel already owns 20 percent of Gold Fields. After the approach announcement, shares in Lonmin rose by 25 percent and boosted other mining stocks as well. But it is reported that the Financial Services Authority (FSA) is looking into share transactions prior to the announcement to see if any fishy deals were concluded.
Analysts say that a combine with Gold Fields would create a mining giant, but it was not very clear if the Russians would support any bid by Gold Fields. Mining stocks are certainly the flavor of the week and until any announcement is forthcoming from Lonmin, these stocks are expected to rise. South Africa supplies about three-quarters of the most precious metal in the world. Platinum is used in jewellery and in catalytic converters in cars.
|
|
|
|
|
|
Print this Story
Have great job? Pay more insurance premium! 