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One Week Left: Will Xstrata (XTA) dump Lonmin (LMI)?

Today's Financial News - Posted September 26, 2008

Xstrata (XTA) has a week to formalize its bid for Lonmin (LMI) but the market says it “ain’t gonna happen.”

I think Xstrata may have taken my advice to heart. A couple of months ago, I advised investors to stay away from Lonmin, and now it looks like Xstrata’s going to do that very thing. Platinum isn’t looking too attractive these days, and neither is this precious metals miner. But I’m not the only one who thinks so.

by Jeffrey Sparshott, Dow Jones Newswire

London — (TFN): Xstrata PLC (XTA:London) is a week away from an Oct. 2 deadline to formalize a hostile bid for Lonmin PLC (LMI:London), but Lonmin’s share price signals serious doubts of a GBP5 billion offer from the Anglo-Swiss miner.

Weak share prices, plunging platinum prices, tight credit markets and a broader financial crisis all are conspiring against a bid for the world’s third-biggest platinum producer, analysts and investors say.

“I think Xstrata will probably walk away,” said a fund manager who asked not to be named. “There is such concern with the general (economic) outlook that caution is the preferred route.”

Xstrata Aug. 6 proposed an all-cash, 3,300 pence a share takeover bid for Lonmin. That is the lowest price Xstrata can bid… Read on to learn more.

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