Africa’s biggest bank said Lonmin Plc investors should reject Sibanye Gold Ltd.’s takeover offer as it undervalues the platinum miner’s assets by as much as 6.64 billion rand ($460 million).
While Sibanye’s offer equates to 11.60 rand a share, Lonmin’s value at current metal prices is 45% higher, Leroy Mnguni, an analyst at SBG Securities, a unit of Standard Bank Group Ltd., said in a note to clients. If assets such as the platinum producer’s suspended K4 project, spare processing capacity and a concentrator are factored in, Lonmin is worth about 35 rand a share, he said.
“Given the compelling indications that the pending Sibanye offer grossly undervalues Lonmin, we see increased risk that more than 25% of the shareholders will vote against the offer,” Mnguni said.
While Lonmin Chief Executive Officer Ben Magara is still recommending the deal, saying his company would otherwise lack capital to invest, Mnguni said the miner could sell some assets to extend the life of its shafts. Many of those have lower costs than operations at rival producers, he said.
TOTAL VALUATION RM | PER SHARE VALUATION R/SHARE | |
---|---|---|
Lonmin Operations | 4,771 | 16.87 |
SBG Total Valuation | 9,916 | 35.06 |
Sibanye Offer | 3,280 | 11.60 |
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Tags:
Latest Stories
-
Paris 2024: Opening ceremony showcases grandiose celebration of French culture and diversity
2 hours -
How decline of Indian vultures led to 500,000 human deaths
3 hours -
Paris 2024: Ghana rocks ‘fabulous fugu’ at olympics opening ceremony
3 hours -
Trust Hospital faces financial strain with rising debt levels – Auditor-General’s report
4 hours -
Electrochem lease: Allocate portions of land to Songor people – Resident demand
4 hours -
82 widows receive financial aid from Chayil Foundation
4 hours -
The silent struggles: Female journalists grapple with Ghana’s high cost of living
4 hours -
BoG yet to make any payment to Service Ghana Auto Group
5 hours -
‘Crushed Young’: The Multimedia Group, JL Properties surprise accident victim’s family with fully-furnished apartment
5 hours -
Asante Kotoko needs structure that would outlive any administration – Opoku Nti
6 hours -
JoyNews exposé on Customs officials demanding bribes airs on July 29
6 hours -
JoyNews Impact Maker Awardee ships first consignment of honey from Kwahu Afram Plains
7 hours -
Joint committee under fire over report on salt mining lease granted Electrochem
7 hours -
Life Lounge with Edem Knight-Tay: Don’t be beaten the third time
8 hours -
Pro-NPP group launched to help ‘Break the 8’
8 hours