UPDATE 1-Xstrata says maybe paid too much for Lonmin stake
Wed Jun 10, 2009 8:12pm IST
in.reuters.com
* Says is still happy with a major stake in Lonmin
* Says CEO was misquoted by analyst (Recasts with Xstrata comments)
LONDON, June 10 (Reuters) - Xstrata Plc (XTA.L: Quote, Profile, Research) is still happy with a major stake in Lonmin Plc (LMI.L: Quote, Profile, Research), but may have paid too much for it, the firm said, denying an analyst report that the CEO regretted the move.
Xstrata spokeswoman Claire Divver said analyst Tony Robson of BMO Capital Markets misquoted Chief Executive Mick Davis during a speech in Toronto.
"The increase in our stake in Lonmin provides a significant interest in one of the world's leading platinum producers," she said.
"It was the right strategy, but with the benefit of hindsight, we could have increased our stake at a lower price."
Xstrata increased its stake in Lonmin (LONJ.J: Quote, Profile, Research), the world's third biggest platinum producer, to 24.9 percent from 10.7 percent last October after dropping a $10 billion takeover bid due to the global financial crisis.
The move to increase the stake by Xstrata, the world's fifth biggest diversified mining group by market value, was widely regarded as setting the scene for a future deal.
"In addition to speaking about Xstrata's numerous successful acquisitions, Mr. Davis spoke frankly about some past mistakes," Robson said in a research note.
Davis was also quoted as saying Xstrata paid too much for Australian nickel producer Jubilee Mines, which included the Sinclair and Cosmos mines. Xstrata, which bought Jubilee for A$3.1 billion in February 2008, said in April it planned to suspend operations at Sinclair if metals prices failed to rebound. [ID:nL9492042]
Xstrata's nickel division, headquartered in Toronto, is the world's fourth largest following its acquisition of sector heavyweight Falconbridge of Canada in 2006.
Xstrata was likely to make a material acquisition in the next 12 months, Robson added. (Reporting by Eric Onstad; editing by Elaine Hardcastle and Hans Peters) |
