Mick Davis takes late-cycle punt with Lonmin bid
The acquisitive miner’s $10 billion cash bid for Lonmin, the world’s third-biggest platinum producer, is opportunistic and far from friendly.
But it has injected a badly needed buzz back into the sickly sector, lifting stocks across the board. And Lonmin investors are already betting on a sweetened offer.
Platinum traders, too, will be cheering Mick’s move. Spot metal prices rose more than 3 percent as traders saw the bid as a vote of confidence for the future of the market.
Winning Lonmin would help Xstrata diversify its business from industrial metals such as copper. It might also help the Swiss-based group retain its independence in the dog-eat-dog mining sector.
Five months ago, Xstrata escaped being bought when a takeover attempt by Brazil’s Vale failed.
(Reuters photo: Xstrata logo at the company’s headquaters in Zug)