Three of the largest investors of Sibanye Gold Ltd., which hold more than a third of the shares, have indicated that they will vote for the planned acquisition of Lonmin Plc, according to people familiar with the case.
Gold One Group, the largest investor of Sibanye with about 19 percent, and the Public Investment Corp. of South Africa, both told the companies that they will support the deal with all parts, said the people who asked not to be identified because the information is private. Exor Investments UK LLP, which owns shares in both companies, has also indicated that it will support the transaction, they said.
The PIC, Africa's largest money manager, owns approximately 9 percent of Sibanye and is Lonmin's largest investor with about 30 percent. The deal requires more than 50 percent clearance in a vote by Sibanye investors, in addition to the approval by Lonmin's shareholders.
Sibanye believes that investors will recognize the rationale of the proposed transaction, according to James Wellsted, spokesperson.
"We feel that if no tough conditions are imposed on us, they will support the transaction," he said.
As of 27 July, the PIC stated that it would not make any public comments on how it would vote on the deal. Gold One, which is owned by a Chinese consortium, did not respond immediately to questions by e-mail. Matteo Scolari, managing director of London-based Exor Investments, declined to comment. Exor held about eight percent of Sibanye from late July, according to Sibanye.
The Lonmin transaction is the latest in a series of deals from Sibanye Chief Executive Officer Neal Froneman, who has transformed the gold mine by expanding to metals from platinum groups and last year bought an American palladium miner for $ 2.2 billion. For Lonmin, the acquisition is a lifeline after the company went through years of losses and was forced to enforce debt-dependent loans from lenders until the beginning of next year.
While Sibanye said this month that the deal is on track, Froneman has warned that investors can not be expected to approve the deal if it means adding more debts. Sibanye is under pressure to reduce loans after the American purchase last year.
The net cash flow from Lonmin rose from $ 17 million in June to $ 23 million at the end of the second quarter, he said in July. The balance has continued to rise since then, said one of the people.
The transaction is assessed by the South African competition authorities and Froneman said he expects to receive approval in the coming months. If that happens in October, the investors of Sibanye could vote in December, he said.
"There is recognition that this is good for Lonmin, it's good for us, that's why our shareholders support it", Froneman said in an interview on August 23rd.
Lonmin closed 2.8 percent higher with a share of ZAR 7.76 in Johannesburg on Friday. Sibanye increased by 6.6 percent to ZAR 8.55 per share.