Analysts question wisdom of Sibanye offer for US miner
Share price picks up after plunge on Stillwater news but far off its high
Sibanye Gold’s share price has returned to levels close to those before it announced a $2.2bn deal to buy North America’s Stillwater Mining, but while analysts say Sibanye is likely to win shareholder approval, some question the merits of buying the palladium miner. Sibanye’s share price plunged 15% on the December 9 news of its friendly cash bid for the whole of Stillwater, the Montana palladium and platinum miner that is the third-largest source of the metals outside SA and Russia. The shares have since moved to R27.08, close to the R24.80 price before the deal was announced but still a long way from the R72.48 high of early August 2016. Sibanye’s market capitalisation was $1.83bn on Tuesday, compared with Stillwater’s $2bn. A number of analysts have said there was likely to be a sizeable discount on a rights issue of between $750m and $1bn to be announced in coming months as Sibanye sought to reduce debt and to fund the purchase, which will be paid for with a $2.7bn bridging loan...
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