Market Tracker weekly bulletin – 1st November 2018

Market Tracker weekly bulletin – 1st November 2018

A round up of key developments in corporate transactions covered by Lexis®PSL Corporate and Market Tracker this week, including an update on the offer for Lonmin plc by Sibanye Gold Limited, and news updates on draft regulations to address the takeover regime post Brexit and draft provisions for a Brexit transition to a standalone UK competition regime. Our focus of the week is on cyber security disclosures, following research carried out by the Market Tracker team into the annual reports of the FTSE 100.

Transactions

Takeovers

Lonmin plc offer by Sibanye Gold Limited (Sibanye-Stillwater)

Lonmin plc (Lonmin), a primary producer of platinum group metals, is listed on the Main Market of the London Stock Exchange and has a secondary listing on the Main Board of the Johannesburg Stock Exchange. Since 14 December 2017, Lonmin has been the subject of a recommended all share offer by South African incorporated Sibanye Gold Limited (trading as Sibanye-Stillwater), structured by way of a scheme of arrangement. The offer value is £285 million.

The decrease in demand for platinum, particularly from the move away from diesel cars (which use the metal in their catalysts) and the increase in costs has had a negative impact on Lonmin.

Platinum prices are at their lowest level for a decade (US$ per troy ounce):

The result of the depreciating price of platinum resulted in Lonmin entering into an agreed £154 million (US$200 million) metal purchase agreement with Chinese incorporated Pangaea Investments Management Limited, an affiliate company of Jiangxi Copper Company Limited (announced 22 October 2018). The upfront payment will be amortised over three years.

Lonmin will distribute the loan proceeds to pay its pre-existing loan of £115.4 million (US$150 million) and to terminate its pre-existing undrawn facilities. The loan will enable Lonmin to recover from its previous losses due to decreased demand.

The board of Lonmin remain confident in their transaction with

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About the author:
Jenisa is Head of Market Tracker, a transaction analysis product that sits within Lexis®PSL Corporate. She has over 13 years of legal publishing experience, with a focus on researching and reporting on trends and developments in the corporate and commercial legal market. Previous roles include content developer for Lexis®PSL, Legal Podcaster at Informa, and Research Editor at Practical Law Company where she specialised in reporting on cross-border corporate and commercial developments from the firm’s New York office.