eBusiness Weekly
Johannesburg. — Sibanye Gold plans to buy Lonmin, marking the end of the smallest and most financially stressed of the world’s three biggest platinum miners.
Sibanye offered £285 million (R5,17 billion) to buy Lonmin in an all-share offer, according to a statement yesterday. The deal, Sibanye’s fourth major acquisition in the past two years, cements the status of Chief Executive Officer Neal Froneman as a top deal-maker in platinum and gold.
“The operating synergies between the two groups do incentivise a merger and could finally allow Lonmin to restructure and optimise its business,” wrote analysts at Berenberg in a research report. “We view this as a positive for Lonmin and a negative for Sibanye on a valuation basis.”
The deal highlights the ascendance of Sibanye, born about five year ago in a spino-ff from Gold Fields, and the death of Lonmin, a company with a 108-year history stretching from Cecil Rhodes’s legacy in southern Africa to a conglomerate in the 1980s spanning mining, hotels and newspapers.
CEO Ben Magara has pushed to get Lonmin back on track and repair its reputation after the shootings at Marikana in 2012, when police killed protesting mineworkers. But it hasn’t been enough. The company has raised about $1,7 billion from shareholders in the past eight years, yet its current market value is about $215 million.
Lonmin shareholders will get 0,967 new shares in Sibanye, which will be about 11,3 percent of the total company after the acquisition is complete. The acquisition has been approved by both boards. Sibanye declined 1 percent to R15,95 at 11:13 in Johannesburg. Lonmin jumped 12 percent to R13,94.
Sibanye was supposed to be a steady, dividend-paying operator of three aging but profitable South African gold mines. Instead, Froneman has led the company to acquisitions outside of gold, including the $2,2 billion takeover of Stillwater Mining this year.
In 2015, Sibanye agreed to buy Aquarius Platinum and made a deal for some aging, high-cost platinum mines from Anglo American Platinum. A year later, the Stillwater acquisition was announced. The deals have come with a price. The Stillwater purchase left Sibanye with net borrowings more than double its annual earnings and the company cancelled its dividend.
Disney to buy Fox film, TV businesses for $52 billion Walt Disney Co on yesterday agreed to buy film, TV and international assets from Rupert Murdoch’s Twenty-First Century Fox Inc for $52,4 billion as Disney seeks greater scale to tackle growing competition from Netflix and Amazon.com.
Under the terms of the all-stock deal, Disney acquires significant assets from Fox, including the studios that produce the blockbuster Marvel superhero pictures and the “Avatar” franchise, as well as hit TV shows such as “The Simpsons”.
Fox shareholders will receive 0,2745 Disney shares for each share held. This translates to a value of $29,50 per share for the assets that Disney is buying, Reuters calculations based on Disney’s Wednesday market closing price show.
Immediately prior to the acquisition, Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.
The deal ends more than half a century of expansion by Murdoch, 86, who turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world’s most important global news and film conglomerates.
Disney Chief Executive Bob Iger, 66, will extend his tenure through the end of 2021 to oversee the integration of the Fox businesses. He has already postponed his retirement from Disney three times, saying in March he was committed to leaving the company in July 2019. Disney will also assume about $13,7 billion of Fox’s net debt in the deal.
Through Fox’s stake in the Hulu video streaming service, Disney will assume majority control of one of Netflix Inc’s main competitors. Hulu is also partially owned by Comcast Corp and Time Warner Inc. Shares in both Disney and Fox were up nearly 1 percent in premarket trading. — Fin24.
