Sibanye shares slide after Lonmin deal approval carries jobs cut freeze
Workers leave Lonmin’s Karee mine at the end of their shift, outside Rustenburg, northwest of Johannesburg July 29, 2015. REUTERS/Siphiwe Sibeko
JOHANNESBURG (Reuters) – Shares in Sibanye-Stillwater fell more than 3 percent in early trade on Thursday, a day after South Africa’s competition regulator ordered a six-month freeze on job cuts in takeover target Lonmin.
Sibanye has offered to buy troubled platinum miner Lonmin for 285 million pounds in an all-share deal that would create the world’s second largest platinum miner.
Late on Wednesday, the Competition Tribunal said it had approved the deal on the condition that there be no layoffs for six months following its implementation.
Sibanye shares were down 2.4 percent at 9.19 rand at 0804 GMT, off a low of 9.13 rand.
“The moratorium does make life a little tougher for Sibanye,” said Paul Chakaduka, a trader at GT247 in Johannesburg. “Also in six months time, they will face resistance from unions over job cuts.”
Cutting jobs is crucial to the industrial logic of the deal with Sibanye having said it intended to cut Lonmin’s workforce by a third to deliver savings of more than $100 million a year by 2021.
Reporting by Tiisetso Motsoeneng; editing by Jason Neely
0 Comments