With Lonmin shares rising over 6% on Monday and Bloomberg reporting, citing 2 seperate sources, that Xstrata are considering making a renewed offer for Lonmin, it is noteworthy that the shares are up again today against a flat market and in rising volume. With continued comments from the current Lonmin management urging shareholders to vote in favour of the rights issue, it seems to us that the clock is ticking for Xstrata to decide whether or not to bid, certainly before the vote on the 19 Nov. Relative to a weak mining sector Lonmin are holding steady and the stock looks to be pricing in a 50% chance of a renewed move by Mick Davis. As detailed previously, if he is to move, then it is likely to be sooner rather than later given the pressing timescale with the right issue.
Xstrata management are speaking to other institutional shareholders in Lonmin this week and, as is always the case with the City which is as leaky as a rusty old ship, we should be vigilant for any smoke signals in the stock price, for example sharp moves on no news and blocks of stock being purchased. It always amazes me how the “insiders” leave a footprint like an elephant in the price history yet the FSA cannot, it seems, secure more convictions for insider trading….
Read the rest of this story:Reports of renewed offer for Lonmin from Xstrata here
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