xstrata raises lonmin stake

Xstrata raises Lonmin stake to 25% to block other bids
Bloomberg reported that Xstrata Plc has raised its stake in Lonmin Plc to 25% to block other bidders from gaining control of Lonmin Plc.

Xstrata spent GBP 440 million to buy 14.2% of Lonmin at an average 1,979 pence a share. It earlier scrapped a planned hostile bid at 3,300 pence as extreme financial-market turmoil prompted concern over funding the deal.

Mr Michael Rawlinson head of mining, resources & energy at Liberum Capital Limited said that "Xstrata are not walking away, but have effectively locked out a competing bid at an attractive average price. We expect Xstrata to come back and bid.''

Mr Mick Davis CEO of Xstrata wants control of Lonmin's South African mines and smelters to restore their output to the levels of two years ago.

He said that "We continue to believe the medium and long-term fundamentals of platinum are robust and that the structure of the platinum industry remains attractive.''

http://www.marketwatch.com/news/story/platinum-group-metals-ltd-closes/story.aspx?guid=%7B52B663FF-3F05-4C65-BD23-6F03E5C687D2%7D&dist=hppr

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