AMCU loses bid to halt platinum merger


AMCU loses bid to halt platinum merger

Published Date: 2019-05-20 | Source: Stephen Gunnion | Author: Stephen Gunnion

AMCU loses bid to halt platinum merger

The Competition Appeal Court has upheld the Competition Tribunal's conditional approval of Sibanye-Stillwater's takeover of Lonmin.

The Competition Appeal Court of SA has dismissed an appeal by the Association of Mineworkers and Construction Union (AMCU) to halt Sibanye-Stillwater's takeover of Lonmin, with costs.

The court's ruling follows the Competition Tribunal's conditional approval of the merger last November. The transaction was delayed after AMCU, the main union at Lonmin, filed an appeal to block it or have it re-examined, arguing that it would ultimately lead to job losses.

While Lonmin has returned to an operating profit, assisted by higher prices for platinum group metals and rand weakness, it believes its future as a standalone producer isn't sustainable due to its weak capital structure. It says this limits its ability to invest in the projects that are needed to avoid closing some of its shafts and shedding more jobs.

Last month, Sibanye-Stillwater increased its offer for Lonmin due to the recent recovery in PGM prices. Under the revised deal, Lonmin shareholders will get one new Sibanye-Stillwater share for each Lonmin share, up from 0.967 Sibanye-Stillwater shares previously. The additional portion of the share works out at an increase of 3.4%. The revised terms valued Lonmin at £226 million and gave its shareholders 10.9% of the combined group, compared to a value of £285 million and 11.3% previously. That's due to a decline in Sibanye-Stillwater's share price since the initial offer was made in December 2017 and a recent equity issue by the larger company.

Shareholders of both companies get to vote on the transaction on 28 May.

Sibanye-Stillwater's shares closed 1.3% lower at R11.37 on Friday while Lonmin rose 5.9% to R11.50.

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