Today's Labour News

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lonminlogo thumb medium90 90Bloomberg writes that the Public Investment Corporation (PIC) faces a tough choice over whether to back Sibanye Gold’s takeover of Lonmin and take a hit on its investment, or scupper the deal and risk having to pony up more cash for the platinum miner.  

When Lonmin shareholder votes are tallied next Tuesday at a meeting in London, the PIC’s 30% stake would be enough to block the acquisition.  While the takeover was originally touted as a lifeline as Lonmin hemorrhaged cash, the PIC is apparently concerned by the drop in Sibanye’s stock since the all-share deal was announced in December 2017.  The state-owned PIC’s deliberations have been complicated by Sibanye’s public disclosure that it won’t raise its offer.  Sibanye last month increased the share ratio it’s offering to Lonmin investors after metal prices rose, but the value of the deal remains lower than when it was first announced.  The 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.  Still, stymieing the deal means the PIC and other Lonmin shareholders might be forced to recapitalise the platinum producer.  The deal requires the support of 75% of Lonmin’s shareholders.

  • Read the full original of this report by Felix Njini at Fin24


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