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JSE
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GEN - XSTRATA PLC - No Intention to make an offer for Lonmin Plc ("Lonmin")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
NEWS RELEASE
XSTRATA PLC LOGO
NO INTENTION TO MAKE AN OFFER FOR LONMIN PLC ("LONMIN")
Zug, 1 October 2008
On 6 August 2008, Xstrata plc ("Xstrata") announced a possible offer for Lonmin
under Rule 2.4 of The City Code on Takeovers and Mergers (the "Code"). On 3
September 2008, the Panel Executive announced that Xstrata must, by 5.00 p.m.
London time on 2 October 2008, either announce a firm intention to make an offer
for Lonmin under Rule 2.5 of the Code or announce that it does not intend to
make an offer for Lonmin.
Xstrata has concluded that, in light of the current unprecedented uncertainty in
the financial markets and due to the requirement in the proposed financing terms
to refinance in the short term a significant tranche of the acquisition debt
facility, finalising the bank debt necessary to implement the offer on those
terms would not be in the best interest of Xstrata. As a result, Xstrata has no
current intention to make an offer for Lonmin.
Mick Davis, Xstrata plc Chief Executive commented:
"Today`s announcement is made against a background of extreme volatility and
uncertainty in the financial markets. The current lack of clarity and certainty
regarding the future availability of credit introduces significant risks into
the financing package available to Xstrata, in respect of the requirement in the
proposed financing terms to refinance a substantial portion of the debt funding
within 12 months. As a result, Xstrata has concluded that it will not proceed
with an offer for Lonmin within the deadline set by the Panel Executive.
"While the current instability of the financial markets has created an
environment of great uncertainty, it does not change the fundamental robust
nature of Xstrata`s cash generative portfolio and profitability. Nor does it
change our long-held view that commodity prices will remain elevated over
historical averages in the medium term, albeit with some short-term weakness.
This view is underpinned by the secular up-shift in demand that is driven by the
industrialisation and urbanisation of China and emerging Asian markets, together
with the real and ongoing constraints which exist in effecting sustained
increases in supply. I remain confident that Xstrata`s strategy to grow
organically and through acquisition to create value for our shareholders remains
in tact and as relevant as ever."
Xstrata reserves the right to acquire Lonmin shares, subject to and in
accordance with the requirements of the Code and other applicable regulations.
For the purposes of Rule 2.8 of the Code, Xstrata reserves the right to make or
participate in an offer for Lonmin (and/or take any other action which would
otherwise be restricted under Rule 2.8 of the Code) within the next six months
following the date of this announcement:
(i) with the agreement or recommendation of the board of directors of Lonmin;
(ii) following the announcement of an offer by or on behalf of a third party for
Lonmin;
(iii)following the announcement by or on behalf of Lonmin of a "whitewash"
proposal (for the purposes of Note 1 on the Notes on Dispensations from
Rule 9 of the Code) or a reverse takeover (as set out in Note 2 on Rule 3.2
of the Code); or
(iv) if there is a material change of circumstances.
Xstrata currently holds 10.68% of Lonmin`s issued share capital or 16,706,481
shares in total.
Ends
Xstrata contacts
Aura Financial
Claire Divver Michael Oke
Telephone +44 20 7968 2871 Telephone +44 20 7321 0033
Mobile +44 7785 964 340 Mobile +44 7834 368 299
Email cdivver@xstrata.com Email michael@aura-
financial.com
Songezo Zibi Investors and analysts
Telephone +27 11 250 0000 Hanre Rossouw
Mobile +27 82 303 8176 Telephone +44 20 7968 2820
Email szibi@xstrata.co.za Mobile +44 7879 455 885
Email hrossouw@xstrata.com
www.xstrata.com
Date: 01/10/2008 08:00:03 Produced by the JSE SENS Department.
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