NEWS ANALYSIS: How Lonmin’s results cast doubt over Sibanye-Stillwater deal
The biggest uncertainty is what Sibanye’s shareholders will do when the vote is held in the second half of 2018
Far from creating confidence that Sibanye-Stillwater’s R5bn takeover of Lonmin is a certainty, the platinum miner’s interim results cast doubt on the deal’s success. The rate of cash burn in Lonmin during the first six months of its financial year was a concern, raising conjecture that it would be in a net debt position by the end of its financial year in September. The transaction needs a number of approvals, with competition and takeover authorities in SA and the UK to sign off on the deal. The shareholders of Lonmin and Sibanye also need to support the all-share offer. The biggest uncertainty is what Sibanye’s shareholders will do when the vote is held in the second half of 2018. The deal needs approval from 51% of its investors. Lonmin CEO Ben Magara relentlessly drove home the point that Lonmin was net cash positive for 11 successive quarters, but the market remained sceptical. One analyst changed his mind about the chances of the deal being concluded, lowering it to 50% from 8...
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