JOHANNESBURG (miningweekly.com) – The Competition Appeal Court of South Africa (CACSA) on Friday gave the green light for JSE- and NYSE-listed Sibanye-Stillwater’s proposed takeover of LSE- and JSE-listed Lonmin, dismissing an appeal filed by the Association of Mineworkers and Construction Union.
CACSA upheld the Competition Tribunal’s decision of November 21, 2018, to approve the deal.
A shareholders meeting on May 28 will determine the final outcome of the deal.
Sibanye-Stillwater in December 2017 made an all-share offer to acquire the embattled Lonmin, with the offer valuing Lonmin at about £285-million, or R5.15-billion.
Sibanye has since increased its offer. Lonmin shareholders will now be entitled to one new Sibanye share for each Lonmin share held, reflecting a 3.4% increase, or an additional 0.033 of a new Sibanye share for each Lonmin share held, relative to the initial offer.
Sibanye CEO Neal Froneman said in a statement on Friday that the companies remain committed to the offer, which will see the integration of Lonmin’s platinum group metals (PGMs) assets and Sibanye’s adjacent PGMs operations, while ensuring a more sustainable future for the assets.
“The combination creates a larger and more diversified company which we believe is in the best interest of Lonmin shareholders and other stakeholders,” Lonmin CEO Ben Magara commented.
Mergence Corporate Solutions mining head Peter Major told Mining Weekly Online that the CACSA’s decision was great news for the platinum industry and South Africa as a whole, considering the jobs and community support that will be retained.
He added that it was also good news for the unions and government, as well as for suppliers of the mines.
Newswire Bloomberg had, earlier on Friday, quoted a “person familiar with the matter” as stating that the State-owned Public Investment Corporation (PIC), which held 30% of Lonmin, was concerned about the value of the all-share deal that has been eroded.
“PIC is troubled by the drop in Sibanye’s stock since the deal was announced in December 2017 as the company battled to cut debt. PIC is also struggling to value Sibanye’s gold operations after they were impacted by a five-month strike and the restructuring of its key mine,” the person told Bloomberg.
Further, according to Bloomberg, the PIC has held talks with Sibanye and will make a final decision on whether to back the deal come the shareholder meeting. The deal requires backing of 75% of Lonmin’s shareholders. In September 2018, PIC indicated that it supported the deal.
Commenting on this, Major said that he can understand the PIC position to some degree because – even though Sibanye’s takeover of Lonmin probably prevented the PIC’s investment in Lonmin falling to zero – they and other shareholders never imagined Sibanye itself performing so poorly.