Wrap Text
Recommended all share offer
Lonmin Plc (Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number 1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN : GB00BYSRJ698 ("Lonmin")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE NEW SIBANYE-STILLWATER SHARES
EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT AND THE
SIBANYE-STILLWATER CIRCULAR WHICH ARE PROPOSED TO BE PUBLISHED IN DUE
COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
14 December 2017
RECOMMENDED ALL-SHARE OFFER
for
Lonmin Plc (“Lonmin”)
by
Sibanye Gold Limited (trading as Sibanye-Stillwater) (“Sibanye-Stillwater”)
to be effected by means of a scheme of arrangement
under Part 26 of the UK Companies Act 2006
Summary
- The Boards of Sibanye-Stillwater and Lonmin are pleased to announce that they have
reached agreement on the terms of a recommended all-share offer pursuant to which
Sibanye-Stillwater, and/or a wholly-owned subsidiary of Sibanye-Stillwater, will acquire the
entire issued and to be issued ordinary share capital of Lonmin (the “Offer”). It is proposed
that the Offer will be effected by means of a scheme of arrangement between Lonmin and
the Lonmin Shareholders under Part 26 of the UK Companies Act.
- Under the terms of the Offer, each Lonmin Shareholder will be entitled to receive:
for each Lonmin Share 0.967 New Sibanye-Stillwater Shares
- Based on the 30 trading day volume weighted average price of R18.67 of Sibanye-Stillwater
Shares on the Johannesburg Stock Exchange for the period ended 13 December 2017
(being the last Business Day prior to the date of this Announcement) and the exchange rate
on that date being R18.056:£1, the Offer values each Lonmin Share at 100.0 pence and
values the existing issued ordinary share capital of Lonmin at approximately £285 million
and represents a premium of approximately:
- 57 per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December
2017; and
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- 41 per cent. to the 30 trading day volume weighted average price per Lonmin Share
for the period ended 13 December 2017 of 71.1 pence.
- The Exchange Ratio of the Offer has been determined using the 30 trading day volume
weighted average price for Sibanye-Stillwater to smooth out the daily movements.
- Based on the closing price of R16.11 of a Sibanye-Stillwater Share on the Johannesburg
Stock Exchange on 13 December 2017 and applying the same exchange rate, the Offer
values each Lonmin Share at 86.3 pence and represents a premium of approximately 35
per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December 2017.
? Following completion of the Acquisition, Lonmin Shareholders will hold approximately 11.3
per cent. of the Enlarged Sibanye-Stillwater Group and Sibanye-Stillwater Shareholders will
hold approximately 88.7 per cent. of the Enlarged Sibanye-Stillwater Group.
? The Exchange Ratio assumes that Lonmin Shareholders will not receive any dividend after
the date of this Announcement. If any dividend or other distribution is authorised, declared,
made or paid in respect of Lonmin Shares on or after the date of this Announcement and
prior to the Effective Date, the Exchange Ratio will be adjusted downwards on an equivalent
basis to reflect the amount of any such dividend or other distribution.
- The Sibanye-Stillwater Group is a South Africa domiciled global precious metals mining
group with its primary listing on the Johannesburg Stock Exchange and an ADR program
traded on the New York Stock Exchange. The Sibanye-Stillwater Group owns and operates
a mix of gold and PGM mines and projects throughout South Africa, Zimbabwe and the
United States. In addition to its mining activities, the Sibanye-Stillwater Group owns and
manages significant gold extraction and processing facilities. Globally, the Sibanye-
Stillwater Group is a major producer of palladium and platinum and features among the
world’s top ten gold producing companies. In line with the Sibanye-Stillwater Group’s
strategy to grow its precious metals business by enhancing and sustaining its position as a
sustainable, strong dividend-paying company, the Sibanye-Stillwater Group has completed
three separate transactions to build its PGM operations and capabilities, specifically via
acquisitions of the platinum assets of the Rustenburg Operations and Aquarius Platinum in
2016 and Stillwater in 2017. The Sibanye-Stillwater Group’s vision is to achieve value
creation for all stakeholders through mining its multi-commodity resources in a safe and
healthy environment.
- The Lonmin Group is a major mine-to-market producer of PGMs with core operations in
South Africa. It produces PGMs predominantly used in many industrial applications as well
as in jewellery and investment, with saleable by-products including gold, copper, nickel,
chrome and cobalt. The Lonmin Group is a major primary producer of PGMs worldwide.
Lonmin Shares are admitted to listing on the premium listing segment of the Official List and
to trading on the Main Market of the London Stock Exchange and have a secondary listing
on the Main Board of the Johannesburg Stock Exchange. Lonmin also has an ADR program
traded on the Over-The-Counter market in the United States. The Lonmin Group has total
assets of US$2,018 million (as at 30 September 2016) and resources of 180.6Moz (3PGE +
Au) and 31.7Moz (3PGE + Au) of reserves (as at 30 September 2016).
Benefits to Lonmin and Lonmin Shareholders
- The Board of Lonmin believes that the Offer is in the best interests of Lonmin Shareholders
and all other stakeholders of Lonmin and provides Lonmin with a comprehensive and
sustainable solution to the adverse challenges it faces. The combination of Sibanye-
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Stillwater and Lonmin creates a larger and more resilient company, with greater
geographical and commodity diversification, that is better able to withstand short-term
commodity price and foreign exchange volatility. The Offer also allows Lonmin Shareholders
to participate in:
- the growth and value creation opportunities of the Enlarged Sibanye-Stillwater
Group;
- the benefits from the realisation of synergies from the combination of Sibanye-
Stillwater and Lonmin; and
- exposure to any long-term recovery in the fundamentals of the PGM sector.
Benefits to the Sibanye-Stillwater Group and Sibanye-Stillwater Shareholders
- The Board of Sibanye-Stillwater believes that the Acquisition is compelling and value
accretive for Sibanye-Stillwater Shareholders and is a logical step in executing its PGM
strategy. By combining Sibanye-Stillwater’s existing, and contiguous, South African PGM
assets with Lonmin's operations, including Lonmin's processing facilities, Sibanye-Stillwater
will be able to unlock operational synergies and become a fully integrated PGM producer in
South Africa.
- In particular, Sibanye-Stillwater has identified the following principal benefits to the Sibanye-
Stillwater Group from the Acquisition:
- consistency with Sibanye-Stillwater’s strategy;
- access to its own processing facilities in South Africa;
- realisation of significant synergies between Sibanye-Stillwater and Lonmin's
contiguous assets; and
- potential upside from developmental projects.
- Sibanye-Stillwater has developed a conservative Lonmin operating plan, which is not
contingent on the development of new major capital projects and therefore limits downside
risk while providing full upside optionality in a higher South African Rand PGM price
environment.
Recommendation by the Lonmin Directors
- The Lonmin Directors, who have been so advised by Gleacher Shacklock, J.P. Morgan
Cazenove and Moshe Capital as to the financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable. In providing advice to the Lonmin Directors, Gleacher
Shacklock, J.P. Morgan Cazenove and Moshe Capital have taken into account the
commercial assessments of the Lonmin Directors.
- The Lonmin Directors consider the terms of the Offer to be in the best interests of Lonmin
Shareholders as a whole and intend unanimously to recommend that Lonmin Shareholders
vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the
Lonmin General Meeting which is to be convened to approve the Offer, as the Lonmin
Directors have irrevocably undertaken to Sibanye-Stillwater to do in respect of their own
beneficial shareholdings in Lonmin which amount in aggregate to 75,498 Lonmin Shares,
representing approximately 0.026698 per cent. of the existing issued ordinary share capital
of Lonmin in issue on 13 December 2017 (being the last Business Day prior to the date of
this Announcement).
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- Further details of these irrevocable undertakings are set out in Appendix III to this
Announcement.
Structure of the Offer
- It is intended that the Offer will be effected by means of a scheme of arrangement under
Part 26 of the UK Companies Act between Lonmin and Lonmin Shareholders. The Offer will
be put to Lonmin Shareholders at the Court Meeting and at the Lonmin General Meeting. In
order to become effective, the Scheme must be approved by a majority in number of the
Lonmin Shareholders voting at the Court Meeting, either in person or by proxy, representing
at least 75 per cent. in value of the Lonmin Shares voted. In addition, special resolutions
implementing the Scheme must be passed by Lonmin Shareholders representing at least 75
per cent. of the votes cast, either in person or by proxy, at the Lonmin General Meeting.
- The Offer is also conditional upon Sibanye-Stillwater Shareholders approving the allotment
and issue of the New Sibanye-Stillwater Shares at the Sibanye-Stillwater Shareholder
Meeting in accordance with clause 8.2.2 of the Sibanye-Stillwater MOI, by way of an
ordinary resolution. Sibanye-Stillwater will therefore seek the requisite approvals of the
Sibanye-Stillwater Shareholders for the allotment and issue of the New Sibanye-Stillwater
Shares for the purposes of the Offer at the Sibanye-Stillwater Shareholder Meeting which is
expected to be held at or around the same time as the Lonmin General Meeting, both of
which will be held as soon as reasonably practicable following the receipt of all the relevant
clearances from the competition and regulatory authorities, in particular those in South
Africa and the United Kingdom (or, if applicable, the European Union, in case a referral is
made to the European Commission pursuant to Article 22 of Council Regulation (EC)
139/2004) (unless Sibanye-Stillwater and Lonmin otherwise agree).
- The Offer is subject to the further Conditions set out in Appendix I to this Announcement,
including the receipt of the relevant clearances from the competition and regulatory
authorities, in particular those in South Africa and the United Kingdom (or, if applicable, the
European Union, in case a referral is made to the European Commission pursuant to Article
22 of Council Regulation (EC) 139/2004), the Licences Condition, the admission of the New
Sibanye-Stillwater Shares to listing and trading on the Main Board of the Johannesburg
Stock Exchange and to the full terms and conditions which will be set out in the Scheme
Document.
- It is expected that the Scheme will become effective in the second half of 2018, subject to
the satisfaction or (where applicable) waiver of the Conditions and certain further terms set
out in Appendix I to this Announcement.
- The Scheme Document, containing further information about the Offer and notices of the
Court Meeting and the Lonmin General Meeting, together with the Forms of Proxy, will be
sent to Lonmin Shareholders in due course around the time that all relevant clearances from
the competition and regulatory authorities, in particular those in South Africa and the United
Kingdom (or, if applicable, the European Union, in case a referral is made to the European
Commission pursuant to Article 22 of Council Regulation (EC) 139/2004), have been
received. The Scheme Document will be made available in due course by Sibanye-Stillwater
on its website at www.sibanyestillwater.com/investors/transactions/lonmin and by Lonmin on
its website at www.lonmin.com/investors/sibanye-stillwater-offer.
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- The Sibanye-Stillwater Circular, containing (amongst other things) the notice of the Sibanye-
Stillwater Shareholder Meeting (including the resolution to be adopted by the Sibanye-
Stillwater Shareholders), together with the Forms of Proxy, will be posted to Sibanye-
Stillwater Shareholders at or around the same time as the Scheme Document is published.
The Sibanye-Stillwater Circular will be made available in due course by Sibanye-Stillwater
on its website at www.sibanyestillwater.com/investors/transactions/lonmin and by Lonmin on
its website at www.lonmin.com/investors/sibanye-stillwater-offer.
Commenting on the Offer, Neal Froneman, Chief Executive Officer of Sibanye-Stillwater, said:
“The proposed combination with Lonmin positions the Enlarged Sibanye-Stillwater Group as
a leading mine-to-market producer of PGMs in South Africa. The realisation of significant
synergies between the operations, which will deliver longer term benefits for all stakeholders
of both companies is expected to result in this being a value accretive transaction for
Sibanye-Stillwater Shareholders. The flexibility inherent in the larger regional PGM footprint
will create a more robust business, better able to withstand volatile PGM prices and
exchange rates. Furthermore, the sizeable combined resource base, with its pipeline of
advanced and early stage projects, also offers significant growth and value upside potential
under appropriate economic and market circumstances.”
Commenting on the Offer, Ben Magara, Chief Executive Officer of Lonmin, said:
“We believe that this Offer is in the best interests of Lonmin, Lonmin Shareholders and all
other stakeholders. Lonmin has an enviable mine-to-market business with great mining
assets, projects and process technology and a resilient workforce. Despite this, Lonmin
continues to be hamstrung by its capital structure and liquidity concerns. The combination
with Sibanye-Stillwater provides a stronger platform for Lonmin Shareholders and other
stakeholders to benefit from the long-term upside potential of an Enlarged Sibanye-
Stillwater Group with greater geographical and commodity diversification. We unanimously
recommend this Offer to Lonmin Shareholders.”
This summary should be read in conjunction with, and is subject to, the full text of this
Announcement (including its appendices). The Offer will be subject to the Conditions and
further terms set out in Appendix I to this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. Appendix II to this
Announcement contains the sources of information and bases of calculations of certain
information contained in this Announcement. Appendix III to this Announcement contains
details of the irrevocable undertakings received in relation to the Offer. Appendix IV to this
Announcement contains details of and bases of calculation of the anticipated financial
benefits of the Offer. Appendix V to this Announcement contains definitions of certain
expressions used in this summary and in this Announcement. The appendices form part of
this Announcement.
For the purposes of Rule 28 of the Takeover Code, quantified financial benefits statements
contained in this Announcement are the responsibility of Sibanye-Stillwater and the
Sibanye-Stillwater Directors. Appendix IV to this Announcement sets out the anticipated
quantified financial benefits statements relating to cost savings and synergies arising out
of the Offer and provides underlying information and bases of belief. Part B and Part C of
Appendix IV to this Announcement also include reports from Sibanye-Stillwater’s reporting
accountant, BDO, and Sibanye-Stillwater’s Financial Advisers, UBS and HSBC, in
connection with anticipated quantified financial benefits statements, as required pursuant
to Rule 28.1(a) of the Takeover Code, and provides underlying information and bases for
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the accountant’s and advisers’ respective reports. Each of BDO, UBS and HSBC has given
and not withdrawn its consent to the publication of its report in this Announcement in the
form and context in which it is included.
Analyst presentation:
There will be an investor and analyst presentation at 11.00 am (Johannesburg time) at the
Johannesburg Stock Exchange, One Exchange Square, Gwen Lane, Sandown, Sandton, 2196,
South Africa, on 14 December 2017. There will be a live webcast of the investor and analyst
presentation available on Sibanye-Stillwater’s website at
www.sibanyestillwater.com/investors/transactions/lonmin and on Lonmin’s website at
www.lonmin.com/investors/sibanye-stillwater-offer.
The recorded briefing and the accompanying slides will be available, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on Sibanye-Stillwater’s website at
www.sibanyestillwater.com/investors/transactions/lonmin and on Lonmin’s website at
www.lonmin.com/investors/sibanye-stillwater-offer.
A copy of this Announcement will be made available in due course, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, for inspection on Sibanye-Stillwater’s
website at www.sibanyestillwater.com/investors/transactions/lonmin and on Lonmin’s website at
www.lonmin.com/investors/sibanye-stillwater-offer. Your attention is also drawn to the important
information below.
Enquiries:
Sibanye-Stillwater
James Wellsted, SVP Investor Relations +27 10 493 6914
UBS (Financial Adviser to Sibanye-Stillwater)
London: Ian Hart +44 (0) 20 7568 8000
Sandip Dhillon
South Africa: Gary Hudson +27 11 322 7000
HSBC (Financial Adviser to Sibanye-Stillwater)
Laurent Charbonnier +44 (0) 20 7991 8096
Gloria Leung
Qinisele Resources (Corporate Adviser to Sibanye-Stillwater) +27 11 883 6358
Dennis Tucker
Andrew Brady
Lonmin
Tanya Chikanza, Group Head: Corporate Strategy & Investor +27 11 218 8358
Relations +44 (0) 20 3908 1073
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Gleacher Shacklock (Financial Adviser to Lonmin) +44 (0) 20 7484 1150
Dominic Lee
Jan Sanders
Paul Finlayson
J.P. Morgan Cazenove (Financial Adviser and Corporate Broker +44 (0) 20 7742 4000
to Lonmin)
Michael Wentworth-Stanley
Dimitri Reading-Picopoulos
Henry Capper
Moshe Capital (Financial Adviser to Lonmin) +27 11 783 9986
Mametja Moshe
Konosoang Asare-Bediako
Cardew Group (Public Relations Adviser to Lonmin) +44 (0) 20 7930 0777
Anthony Cardew +44 7770 720 389
David Roach
Linklaters LLP is acting as legal adviser to Sibanye-Stillwater in the United Kingdom and the
United States and Edward Nathan Sonnenbergs Incorporated is acting as legal adviser to
Sibanye-Stillwater in South Africa. Herbert Smith Freehills LLP is acting as legal adviser to Lonmin
in the United Kingdom and Cliffe Dekker Hofmeyr Incorporated is acting as legal adviser to Lonmin
in South Africa. Greenhill is acting as financial restructuring adviser to Lonmin.
Important notices
UBS Limited is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority in the UK and UBS South Africa (Pty) Ltd is registered with the Financial
Services Board in South Africa (collectively “UBS”). UBS is acting exclusively as financial adviser
to Sibanye-Stillwater and no one else in connection with the Offer and shall not be responsible to
anyone other than Sibanye-Stillwater for providing the protections afforded to clients of UBS nor
for providing advice in relation to such matters.
HSBC, which is authorised by the Prudential Regulation Authority and regulated in the UK by the
Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively as
financial adviser to Sibanye-Stillwater and no one else in connection with the Offer and shall not
be responsible to anyone other than Sibanye-Stillwater for providing the protections afforded to
clients of HSBC nor for providing advice in connection with the Offer or any matter referred to
herein.
Qinisele Resources is acting exclusively as corporate adviser to Sibanye-Stillwater and no one
else in connection with the Offer and shall not be responsible to anyone other than Sibanye-
Stillwater for providing the protections afforded to clients of Qinisele Resources nor for providing
advice in connection with the Offer or any matter referred to herein.
Gleacher Shacklock LLP (“Gleacher Shacklock”), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to
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Lonmin and no one else in connection with the matters set out in this Announcement and will not
be responsible to anyone other than Lonmin for providing the protections afforded to clients of
Gleacher Shacklock or for providing advice in connection with the subject matter of this
Announcement or any other matter referred to herein.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan
Cazenove (“J.P. Morgan Cazenove”), is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United
Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to Lonmin and no one
else in connection with the matters set out in this Announcement and will not regard any other
person as its client in relation to the matters set out in this Announcement and will not be
responsible to anyone other than Lonmin for providing the protections afforded to clients of J.P.
Morgan Cazenove or its affiliates, or for providing advice in relation to the contents of this
Announcement or any other matter referred to herein.
Moshe Capital, which is an Authorised Financial Services provider and regulated in South Africa
by the Financial Services Board, is acting exclusively as financial adviser to Lonmin and no one
else in connection with the Offer and shall not be responsible to anyone other than Lonmin for
providing the protections afforded to clients of Moshe Capital nor for providing advice in
connection with the Offer or any matter referred to herein.
Greenhill, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting
exclusively as financial restructuring adviser to Lonmin and no one else in connection with ongoing
discussions with its existing lenders and shall neither be responsible to anyone other than Lonmin
for providing the protections afforded to clients of Greenhill nor for providing advice in connection
with ongoing discussions with Lonmin’s existing lenders or any matter referred to herein.
Further information
This Announcement is for information purposes only. It is not intended to and does not constitute,
or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval
in any jurisdiction, pursuant to the Offer or otherwise, nor will there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of applicable law.
The Offer will be made solely by means of the Scheme Document which, together with the Forms
of Proxy, will contain the full terms and conditions of the Offer including details of how to vote in
respect of the Offer.
This Announcement has been prepared for the purpose of complying with English law and the
Takeover Code and the information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws and regulations of
jurisdictions outside the United Kingdom.
Sibanye-Stillwater will prepare the Sibanye-Stillwater Circular to be distributed to Sibanye-
Stillwater Shareholders. Lonmin will prepare the Scheme Document to be distributed to Lonmin
Shareholders. Sibanye-Stillwater urges Lonmin Shareholders to read the Scheme Document
carefully when it becomes available because it will contain important information in relation to the
Offer, the New Sibanye-Stillwater Shares and the Enlarged Sibanye-Stillwater Group. Sibanye-
Stillwater urges Sibanye-Stillwater Shareholders to read the Sibanye-Stillwater Circular when it
becomes available because it will contain important information in relation to the New Sibanye-
Stillwater Shares. Any vote in respect of the resolutions to be proposed at the Court Meeting, the
Lonmin General Meeting and the Sibanye-Stillwater Shareholder Meeting to approve the Offer or
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the allotment and issue of the New Sibanye-Stillwater Shares (as applicable) and related matters,
should be made only on the basis of the information contained in the Scheme Document and, in
the case of Sibanye-Stillwater Shareholders, the Sibanye-Stillwater Circular.
This Announcement does not constitute a prospectus or prospectus equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to
comply with the applicable requirements may constitute a violation of the laws of any such
jurisdiction.
The Offer relates to shares of a UK company and is proposed to be effected by means of a
scheme of arrangement under the laws of England and Wales. A transaction effected by means of
a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US
Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and
practices applicable in the United Kingdom to schemes of arrangement, which differ from the
requirements of US proxy solicitation or tender offer rules. However, if Sibanye-Stillwater were to
elect to implement the Offer by means of a takeover offer, such takeover offer will be made in
compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange
Act and Regulation 14E thereunder. Such a takeover would be made in the United States by
Sibanye-Stillwater and no one else. In addition to any such takeover offer, Sibanye-Stillwater,
certain affiliated companies and the nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in Lonmin outside such takeover offer during
the period in which such takeover offer would remain open for acceptance. If such purchases or
arrangements to purchase were to be made they would be made outside the United States and
would comply with applicable law, including the US Exchange Act. Any information about such
purchases will be disclosed as required in the UK, will be reported to a Regulatory Information
Service of the UKLA and will be available on the London Stock Exchange website:
www.londonstockexchange.com.
The financial information included in this Announcement has been prepared in accordance with
accounting standards applicable in the UK and South Africa and thus may not be comparable to
financial information of US companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the United States.
Unless otherwise determined by Sibanye-Stillwater or required by the Takeover Code, and
permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into
or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the
Offer will not be capable of acceptance from or within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly,
copies of this Announcement and all documents relating to the Offer are not being, and must not
be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or
from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and
persons receiving this Announcement and all documents relating to the Offer (including
custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or
from such jurisdictions where to do so would violate the laws in that jurisdiction.
The availability of the Offer to Lonmin Shareholders who are not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who
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are not resident in the United Kingdom should inform themselves of, and observe, any applicable
requirements.
The New Sibanye-Stillwater Shares may not be offered, sold or delivered, directly or indirectly, in,
into or from any Restricted Jurisdiction or to, or for the account or benefit of, any Restricted
Overseas Persons except pursuant to an applicable exemption from, or in a transaction not
subject to, applicable securities laws of those jurisdictions.
Notes to US holders of Lonmin Shares
The New Sibanye-Stillwater Shares, which will be issued in connection with the Offer, have not
been, and will not be, registered under the US Securities Act or under the securities law of any
state, district or other jurisdiction of the United States. Accordingly, the New Sibanye-Stillwater
Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or
indirectly, in or into or from the United States absent registration under the US Securities Act or an
exemption therefrom. The New Sibanye-Stillwater Shares are expected to be issued in reliance
upon the exemption from the registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. Lonmin Shareholders (whether or not US persons) who are or will be
affiliates (within the meaning of the US Securities Act) of Sibanye-Stillwater or Lonmin prior to, or
of Sibanye-Stillwater after, the Effective Date will be subject to certain US transfer restrictions
relating to the New Sibanye-Stillwater Shares received pursuant to the Scheme. For the purposes
of qualifying for the exemption from the registration requirements of the US Securities Act afforded
by Section 3(a)(10), Lonmin will advise the Court that its sanctioning of the Scheme will be relied
upon by Sibanye-Stillwater as an approval of the Scheme following a hearing on its fairness to
Lonmin Shareholders.
The receipt of New Sibanye-Stillwater Shares pursuant to the Offer by a US Lonmin Shareholder
may be a taxable transaction for US federal income tax purposes and under applicable state and
local, as well as foreign and other, tax laws. Each Lonmin Shareholder is urged to consult his
independent professional adviser immediately regarding the tax consequences of the Offer.
It may be difficult for US Lonmin Shareholders to enforce their rights and claims arising out of the
US federal securities laws, since Sibanye-Stillwater and Lonmin are located in countries other than
the United States, and some or all of their officers and directors may be residents of countries
other than the United States. US Lonmin Shareholders may not be able to sue a non-US company
or its officers or directors in a non-US court for violations of the US securities laws. Further, it may
be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s
judgment.
None of the securities referred to in this Announcement have been approved or disapproved by
the SEC, any state securities commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the adequacy or accuracy of the
information contained in this Announcement. Any representation to the contrary is a criminal
offence in the United States.
The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the Financial Conduct Authority, the UKLA and the Johannesburg Stock
Exchange.
Forward-looking statements
This Announcement contains forward-looking statements within the meaning of the “safe harbour”
provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-
looking statements, including, among others, those relating to Sibanye-Stillwater’s and Lonmin’s
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financial positions, business strategies, plans and objectives of management for future operations,
are necessarily estimates reflecting the best judgement of the senior management and directors of
Sibanye-Stillwater and Lonmin. All statements other than statements of historical facts in this
Announcement may be forward-looking statements. Forward-looking statements also often use
words such as “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances and should be considered in light of various important factors,
including those set forth in this disclaimer. Readers are cautioned not to place undue reliance on
such statements. The important factors that could cause Sibanye-Stillwater’s and Lonmin’s actual
results, performance or achievements to differ materially from those in the forward-looking
statements include, among others, economic, business, political and social conditions in the
United Kingdom, South Africa, Zimbabwe and elsewhere; changes in assumptions underlying
Sibanye-Stillwater’s and Lonmin’s estimation of their current mineral reserves and resources; the
ability to achieve potential synergies from the Offer; the ability to achieve anticipated efficiencies
and other cost savings in connection with past and future acquisitions, as well as at existing
operations; the success of Sibanye-Stillwater’s and Lonmin’s business strategies, exploration and
development activities; the ability of Sibanye-Stillwater and Lonmin to comply with requirements
that they operate in a sustainable manner; changes in the market price of gold, PGMs and/or
uranium; the occurrence of hazards associated with underground and surface gold, PGMs and
uranium mining; the occurrence of labour disruptions and industrial action; the availability, terms
and deployment of capital or credit; changes in relevant government regulations, particularly
environmental, tax, health and safety regulations and new legislation affecting water, mining,
mineral rights and business ownership, including any interpretations thereof which may be subject
to dispute; the outcome and consequence of any potential or pending litigation or regulatory
proceedings or other environmental, health and safety issues; power disruptions, constraints and
cost increases; supply chain shortages and increases in the price of production inputs; fluctuations
in exchange rates, currency devaluations, inflation and other macro-economic monetary policies;
the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance;
their ability to hire and retain senior management or sufficient technically skilled employees, as
well as their ability to achieve sufficient representation of historically disadvantaged South Africans’
in management positions; failure of information technology and communications systems; the
adequacy of insurance coverage; any social unrest, sickness or natural or man-made disaster at
informal settlements in the vicinity of some of Sibanye-Stillwater’s operations; and the impact of
HIV, tuberculosis and other contagious diseases. These forward-looking statements speak only as
of the date of this Announcement. Sibanye-Stillwater and Lonmin expressly disclaim any obligation
or undertaking to update or revise any forward-looking statement (except to the extent legally
required).
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and
no statement in this Announcement should be interpreted to mean that earnings or earnings per
share for Sibanye-Stillwater or Lonmin, as appropriate, for the current or future financial years
would necessarily match or exceed the historical published earnings or earnings per share for
Sibanye-Stillwater or Lonmin, as appropriate.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of
any class of relevant securities of an offeree company or of any securities exchange offeror (being
any offeror other than an offeror in respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position Disclosure following the
11
commencement of the offer period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain details
of the person’s interests and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no
th
later than 3.30 pm (London time) on the 10 business day following the commencement of the
th
offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10 business day
following the announcement in which any securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent.
or more of any class of relevant securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person’s interests and short positions in, and rights to subscribe for,
any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been disclosed under Rule 8 of the Takeover
Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Takeover Code applies must
be made by no later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3
of the Takeover Code.
Opening Position Disclosures must also be made by the offeree company and by any offeror and
Dealing Disclosures must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant securities Opening
Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table
on the Panel’s website at http://www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on
+44 (0) 20 7638 0129.
Electronic communications
Please be aware that addresses, electronic addresses and certain information provided by Lonmin
Shareholders, persons with information rights and other relevant persons for the receipt of
communications from Lonmin may be provided to Sibanye-Stillwater during the Offer Period as
requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the
Takeover Code.
Publication on website and availability of hard copies
A copy of this Announcement will be made available in due course subject to certain restrictions
relating to persons resident in Restricted Jurisdictions on Sibanye-Stillwater’s and Lonmin’s
websites at www.sibanyestillwater.com/investors/transactions/lonmin and
12
www.lonmin.com/investors/sibanye-stillwater-offer, respectively, by no later than 12 noon (London
time) on 15 December 2017. For the avoidance of doubt, the contents of these websites are not
incorporated into and do not form part of this Announcement.
You may request a hard copy of this Announcement by: (i) contacting James Wellsted, SVP
Investor Relations of Sibanye-Stillwater, on +27 10 493 6923 or via email at
james.wellsted@sibanyestillwater.com, or Cain Farrel, Company Secretary of Sibanye-Stillwater,
on +27 10 493 6921 or via email at cain.farrel@sibanyestillwater.com, during business hours; or
(ii) contacting St James Corporate Services Limited during business hours on +44 (0) 20 7796
8644 or by submitting a request in writing to St James’s Corporate Services Limited at Suite 31,
Second Floor, 107 Cheapside, London, EC2V 6DN, United Kingdom. You may also request that all
future documents, announcements and information to be sent to you in relation to the Offer should
be in hard copy form.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
that precede them.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Takeover Code, Lonmin confirms that, as at the date of this
Announcement, it has in issue 282,784,288 ordinary shares of US$0.0001 each. No ordinary
shares are held in treasury. The International Securities Identification Number (ISIN) of the
ordinary shares is GB00BYSRJ698. Lonmin has an ADR program for which Bank of New York
Mellon acts as the depositary. Each Lonmin ADS represents one ordinary share of Lonmin. The
Lonmin ADSs trade on the Over-The-Counter market in the United States. The trading symbol for
the ADSs is LNMIY and the ISIN is US54336Q3020.
In accordance with Rule 2.9 of the Takeover Code, Sibanye-Stillwater confirms that, as at the date
of this Announcement, it has in issue 2,168,721,220 ordinary shares of no par value. No ordinary
shares are held in treasury. The International Securities Identification Number (ISIN) of the
ordinary shares is ZAE000173951. Sibanye-Stillwater has an ADR program for which Bank of New
York Mellon acts as depositary. Each Sibanye-Stillwater ADS represents four Sibanye-Stillwater
Shares. The Sibanye-Stillwater ADRs trade on the New York Stock Exchange. The trading symbol
for the Sibanye-Stillwater ADSs is SBGL and the ISIN is US8257242060.
13
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE NEW SIBANYE-STILLWATER SHARES
EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT AND THE
SIBANYE-STILLWATER CIRCULAR WHICH ARE PROPOSED TO BE PUBLISHED IN DUE
COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
14 December 2017
RECOMMENDED ALL-SHARE OFFER
for
Lonmin Plc (“Lonmin”)
by
Sibanye Gold Limited (trading as Sibanye-Stillwater) (“Sibanye-Stillwater”)
to be effected by means of a scheme of arrangement
under Part 26 of the UK Companies Act 2006
1 Introduction
The Boards of Sibanye-Stillwater and Lonmin are pleased to announce that they have
reached agreement on the terms of a recommended all-share offer pursuant to which
Sibanye-Stillwater, and/or a wholly-owned subsidiary of Sibanye-Stillwater, will acquire the
entire issued and to be issued ordinary share capital of Lonmin (the “Offer”). It is proposed
that the Offer will be effected by means of a scheme of arrangement between Lonmin and
the Lonmin Shareholders under Part 26 of the UK Companies Act.
2 The Offer
Under the terms of the Offer, which will be subject to the Conditions and further terms set
out below and in Appendix I to this Announcement and the full terms and conditions which
will be set out in the Scheme Document, each Lonmin Shareholder will be entitled to
receive:
for each Lonmin Share 0.967 New Sibanye-Stillwater Shares
Based on the 30 trading day volume weighted average price of R18.67 of Sibanye-Stillwater
Shares on the Johannesburg Stock Exchange for the period ended 13 December 2017
(being the last Business Day prior to the date of this Announcement) and the exchange rate
on that date being R18.056:£1, the Offer values each Lonmin Share at 100.0 pence and
values the existing issued ordinary share capital of Lonmin at approximately £285 million
and represents a premium of approximately:
- 57 per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December
2017; and
14
- 41 per cent. to the 30 trading day volume weighted average price per Lonmin Share
for the period ended 13 December 2017 of 71.1 pence.
The Exchange Ratio of the Offer has been determined using the 30 trading day volume
weighted average price for Sibanye-Stillwater to smooth out the daily movements.
Based on the closing price of R16.11 of a Sibanye-Stillwater Share on the Johannesburg
Stock Exchange on 13 December 2017 and applying the same exchange rate, the Offer
values each Lonmin Share at 86.3 pence and represents a premium of approximately 35
per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December 2017.
Following completion of the Acquisition, Lonmin Shareholders will hold approximately 11.3
per cent. of the Enlarged Sibanye-Stillwater Group and Sibanye-Stillwater Shareholders will
hold approximately 88.7 per cent. of the Enlarged Sibanye-Stillwater Group.
The Exchange Ratio assumes that Lonmin Shareholders will not receive any dividend after
the date of this Announcement. If any dividend or other distribution is authorised, declared,
made or paid in respect of Lonmin Shares on or after the date of this Announcement and
prior to the Effective Date, the Exchange Ratio will be adjusted downwards on an equivalent
basis to reflect the amount of any such dividend or other distribution.
It is expected that the Scheme will become effective in the second half of 2018, subject to
the satisfaction or (where applicable) waiver of the Conditions and certain further terms set
out in Appendix I to this Announcement.
Sibanye-Stillwater Shareholder approval will also be required in relation to the allotment and
issue of the New Sibanye-Stillwater Shares to Lonmin Shareholders in accordance with
clause 8.2.2 of the Sibanye-Stillwater MOI, by way of an ordinary resolution. For the
ordinary resolution to be approved, it must be supported by more than 50 per cent. of the
voting rights exercised on the ordinary resolution at the Sibanye-Stillwater Shareholder
Meeting. Sibanye-Stillwater will therefore seek the requisite approvals of the Sibanye-
Stillwater Shareholders for the allotment and issue of the New Sibanye-Stillwater Shares for
the purposes of the Offer at the Sibanye-Stillwater Shareholder Meeting which is expected
to be held at or around the same time as the Lonmin General Meeting, both of which will be
held as soon as reasonably practicable following the receipt of all of the relevant clearances
from the competition and regulatory authorities, in particular those in South Africa and the
United Kingdom (or if applicable, the European Union, in case a referral is made to the
European Commission pursuant to Article 22 of Council Regulation (EC) 139/2004) (unless
Sibanye-Stillwater and Lonmin otherwise agree).
The Scheme Document will be published in due course around the time that all relevant
clearances from the competition and regulatory authorities, in particular those in South
Africa and the United Kingdom (or, if applicable, the European Union, in case a referral is
made to the European Commission pursuant to Article 22 of Council Regulation (EC)
139/2004), have been received. The Scheme Document will be made available in due
course by Sibanye-Stillwater on its website at
www.sibanyestillwater.com/investors/transactions/lonmin and by Lonmin on its website at
www.lonmin.com/investors/sibanye-stillwater-offer.
The Sibanye-Stillwater Circular, containing (amongst other things) the notice of the Sibanye-
Stillwater Shareholder Meeting (including the resolution to be adopted by the Sibanye-
Stillwater Shareholders), together with the Forms of Proxy, will be posted to Sibanye-
Stillwater Shareholders at or around the same time as the Scheme Document is published.
15
The Sibanye-Stillwater Circular will also be made available in due course by Sibanye-
Stillwater on its website at www.sibanyestillwater.com/investors/transactions/lonmin and by
Lonmin on its website at www.lonmin.com/investors/sibanye-stillwater-offer.
3 Background to and reasons for the Offer
Sibanye-Stillwater believes that the Acquisition is compelling for Sibanye-Stillwater
Shareholders and is a logical step in executing its PGM strategy. By combining Sibanye-
Stillwater’s existing, and contiguous, South African PGM assets with Lonmin's operations,
including Lonmin's processing facilities, Sibanye-Stillwater will be able to unlock operational
synergies and become a fully integrated PGM producer in South Africa, thereby creating
value for all stakeholders.
In particular, Sibanye-Stillwater has identified the following principal benefits to the Sibanye-
Stillwater Group from the Acquisition:
Consistent with Sibanye-Stillwater’s strategy
The Acquisition is consistent with Sibanye-Stillwater’s South African PGM strategy following
the acquisitions of Aquarius Platinum and the Rustenburg Operations from Anglo American
Platinum. This strategy is underpinned by enhancing operational profitability through the
realisation of operational and overhead synergies, thereby ensuring the sustainability of
operations and creating value for all stakeholders. The contiguous nature of the Lonmin and
Rustenburg Operations enhances the scale of Sibanye-Stillwater’s operations, providing
further opportunities to effectively allocate capital, improve asset performance of the asset
base and facilitate operational flexibility. Optimising the utilisation on the combined assets
will create long-term value for Sibanye-Stillwater Shareholders and benefit all stakeholders
in the region.
1
Sibanye-Stillwater is a global PGM producer with 4E production of approximately 1.70Moz.
The Acquisition will materially expand Sibanye-Stillwater’s PGM footprint, adding
approximately 31.7Moz in proven and probable reserves (as per Lonmin’s declared mineral
reserves at 30 September 2016) and is expected to give the Enlarged Sibanye-Stillwater
2
Group pro forma 4E production of 2.80Moz.
Access to own processing facilities in South Africa
Lonmin is one of only three fully integrated South African PGM producers with full ownership
of a metallurgical processing complex, including smelting, base and precious metals refining
facilities. The addition of these mine-to-market capabilities in South Africa (at an acquisition
cost of significantly less than replacement cost) represents a logical step for Sibanye-
Stillwater's South African PGM business, creating a fully integrated precious metals
producer. Lonmin's processing facilities will allow Sibanye-Stillwater in due course to smelt
and refine ore from its existing Rustenburg Operations, enhancing and improving the
economics of those operations, while simultaneously ensuring a sustainable source of
material for these facilities, therefore maximising return on assets.
Realisation of significant synergies between Sibanye-Stillwater and Lonmin's
contiguous assets
1
Sibanye-Stillwater’s last two quarters, September 2017 and June 2017, attributable 4E production annualised.
2
Sibanye-Stillwater’s last two quarters of attributable 4E production annualised plus Lonmin’s LTM 4E production for
September 2017.
16
The Board of Sibanye-Stillwater believes that, as a direct result of the Acquisition, there are
a number of areas where the Enlarged Sibanye-Stillwater Group could benefit from
attractive synergies, creating additional value for Sibanye-Stillwater Shareholders. Sibanye-
Stillwater has demonstrated its ability to extract synergies from the recently acquired
Aquarius Platinum and Rustenburg Operations. Sibanye-Stillwater has already realised
R550 million per annum in annualised operational synergies as at 30 June 2017 from the
Aquarius Platinum and Rustenburg Operations acquisitions and is expected to realise
approximately R1,000 million of annualised synergies by 2018.
Sibanye-Stillwater has identified expected total pre-tax run-rate synergies of approximately
R1,500 million by 2021, averaging approximately R1,280 million per annum for the period
2021 to 2032, as a result of the Acquisition, including:
- in relation to overhead services, a total of approximately R730 million per annum by
2021, with respect to:
- shared services between members of the Enlarged Sibanye-Stillwater
Group;
- overhead costs in respect of management and marketing;
- shared mining services; and
- shared corporate and regulatory costs;
- in relation to processing synergies, a total of approximately R780 million per annum
by 2021, averaging approximately R550 million per annum for the period 2021 to
2032, primarily by utilising spare capacity within Lonmin’s smelting and refining
infrastructure to process concentrate produced by the Rustenburg Operations.
These savings from overhead synergies and reduced processing costs are separate from
those matters contained in Lonmin’s Operational Review (as described in paragraph 4 of
this Announcement) and those matters addressed in Lonmin’s evolving business plan (as
described in paragraph 8 of this Announcement).
Sibanye-Stillwater estimates that the implementation of the overhead synergies would give
rise to expected one-off costs of approximately R80 million and a headcount reduction of
approximately 700. In addition, implementation of the processing synergies would give rise
to expected one-off costs of approximately R1,000 million, such one-off costs to be incurred
primarily in relation to the construction of an additional smelting furnace and Sibanye-
Stillwater will continue to explore other ways to mitigate such one-off costs.
Aside from such one-off costs referred to above, Sibanye-Stillwater does not expect any
material dis-synergies to arise in connection with the Acquisition.
Sibanye-Stillwater has also identified a number of further initiatives and benefits which are
not included in the quantified estimate of achievable synergies, including:
- the ability to mine through existing mine boundaries between Sibanye-Stillwater and
Lonmin operations, allowing for the optimisation of ore extraction in these areas;
- optimal use of surface infrastructure, including concentrators, tailings deposition
facilities and training and engineering infrastructure;
- optimising the mining mix of Merensky and UG2 of the Enlarged Sibanye-Stillwater
Group;
17
- new growth capital and project prioritisation; and
- capital reorganisation in line with Sibanye-Stillwater’s new consolidated regional
plan.
The ability to realise synergies within the combined portfolio underpins the value enhancing
nature of the Acquisition for Sibanye-Stillwater Shareholders. Sibanye-Stillwater anticipates
that the Acquisition will be net asset value accretive on completion of the Acquisition and
earnings and cash flow accretive in respect of Sibanye-Stillwater Shares from 2021, once
the related one-off costs referred to in this paragraph 3 have been incurred and the
identified synergies begin to be realised in full by the Enlarged Sibanye-Stillwater Group.
The Acquisition is expected to enhance the Enlarged Sibanye-Stillwater Group’s ability to
withstand the current low PGM price environment and short-term industry volatility, while
also funding the long-term growth potential of the existing resources with expected
improving market and economic conditions. The Enlarged Sibanye-Stillwater Group will also
benefit from reduced operational risk, as greater asset diversity reduces the impact of
production and disruption risk.
These statements of estimated cost savings and synergies relate to future actions and
circumstances which, by their nature, involve risks, uncertainties and contingencies. As a
result, the cost savings and synergies referred to may not be achieved, may be achieved
later or sooner than estimated, or those achieved could be materially different from those
estimated. For the purposes of Rule 28 of the Takeover Code, the statements of estimated
cost savings and synergies contained in this Announcement are solely the responsibility of
Sibanye-Stillwater and the Sibanye-Stillwater Directors, and are expected to arise as a
direct result of the Acquisition and could not be achieved independently of the Acquisition.
Neither this statement nor any other statement in this Announcement are intended to be a
profit forecast and should not be interpreted to mean that earnings per Sibanye-Stillwater
Share for the current or future financial years would necessarily match or exceed the
historical published earnings per Sibanye-Stillwater Share.
Part A of Appendix IV to this Announcement includes a copy of these statements of
anticipated cost savings and synergies arising out of the Acquisition and provides underlying
information and bases of belief. Part B and Part C of Appendix IV to this Announcement also
include reports from Sibanye-Stillwater’s reporting accountant, BDO, and Sibanye-
Stillwater’s Financial Advisers, UBS and HSBC, in connection with the anticipated quantified
financial benefits statement, as required pursuant to Rule 28.1(a) of the Takeover Code.
Each of BDO, UBS and HSBC has given and not withdrawn its consent to the publication of
its report in this Announcement in the form and context in which it is included.
Potential upside from developmental projects
The Acquisition will materially expand Sibanye-Stillwater’s PGM footprint, adding 180.6Moz
in measured, indicated and inferred resources. This significant resource base includes well
advanced projects, providing significant upside optionality to deliver future stakeholder value
in an appropriate economic environment. These attractive brownfield projects include K4,
Limpopo and Pandora, as well as a greenfields project pipeline, including Akanani.
Sibanye-Stillwater’s approach to Lonmin’s operations
By applying Sibanye-Stillwater’s operating model, Sibanye-Stillwater has the ability to create
value for both Sibanye-Stillwater Shareholders and Lonmin Shareholders. As part of a larger
entity, Lonmin’s operations will be less constrained by significant fixed overhead costs which
18
have in the past driven the need to fill processing capacity. This has resulted in the need to
plan for sub-optimal capital deployment and the potential for cross subsidisation of
unprofitable mining areas. The Acquisition will enhance Sibanye-Stillwater's flexibility to
apply a more prudent approach to capital investment with respect to Lonmin's assets, more
closely aligned to market demands and commodity prices, enhancing the longer term
sustainability of the operations for the benefit of all stakeholders.
To this end, Sibanye-Stillwater has developed a conservative Lonmin operating plan, which
is not contingent on the development of new major capital projects and therefore limits
downside risk while providing full upside optionality in appropriate economic and market
circumstances.
4 Background to and reasons for the Lonmin Directors’ recommendation
Lonmin has experienced financial constraints for a number of years caused by a range of
external factors such as a persistently low PGM pricing environment and the inflationary
cost pressures of operating in the South African PGM mining industry, which have been
further exacerbated by internal factors including operational, social and labour issues.
On 21 October 2015, Lonmin announced a rights issue to raise approximately US$407
million in gross proceeds and executed an agreement on an amended facilities agreement
with its lenders, together with a new business plan, which were intended to put the Lonmin
Group in a stronger financial position and enable it to deal with a low PGM pricing
environment. The 2015 rights issue was the third rights issue undertaken by the Lonmin
Group since 2009, with approximately US$1.6 billion of aggregate gross proceeds raised
from the three rights issues.
Since 2015, Lonmin’s strategy has been to focus on factors within its control in order to
maintain broadly flat unit costs and cash generation, with a particular focus on reducing
fixed costs, removing high cost production, reducing capital expenditure and continuing to
improve relationships with key stakeholders. However, the adverse PGM pricing
environment has continued to prevail and the inflationary cost pressures have remained,
exacerbated by a strong R:US$ exchange rate.
On 15 May 2017, as part of its interim results for the period ended 31 March 2017, Lonmin
announced that its auditors had identified an issue in relation to the Lonmin Group’s ability
to continue as a going concern due to a material uncertainty in relation to its existing debt
facilities. This was due to a non-cash impairment to the carrying value of the Lonmin
Group’s assets, and the possibility that a further impairment could result in Lonmin
breaching its consolidated tangible net worth (“TNW”) financial covenants and thereby
triggering the potential withdrawal of the Lonmin Group's debt facilities. The TNW financial
covenants are reviewed monthly with significant movements in TNW likely to result from
impairment reviews which take place every six months on the reporting dates. Impairments
are driven by variables including macroeconomic factors outside Lonmin’s direct control,
such as the period-end R:US$ exchange rate (the volatility of which also creates inherent
uncertainty around the impairment testing) and the PGM price outlook.
On 7 August 2017, Lonmin announced the initial conclusions of an ongoing operational
review (the “Operational Review”) with the primary objective of preserving value for
shareholders and safeguarding the long-term interests of employees and all key
stakeholders. The immediate results of the Operational Review included initiatives to
generate cash and reduce fixed costs with the objective of supporting a sustainable
19
business. This included exploring the potential disposal of selected assets and the reduction
in fixed overhead costs by R500 million by the end of the financial year ending 30
September 2018.
On 6 October 2017, Lonmin announced that it had requested and obtained a pre-emptive
waiver for its TNW financial covenants from its lenders until 30 March 2018 to provide
sufficient time to reach a conclusion on its Operational Review.
On 3 November 2017, Lonmin announced that the publication of its audited financial
statements for the financial year ended 30 September 2017 would be delayed pending
potentially significant outcomes of the Operational Review. Lonmin noted that such
outcomes (together with ongoing discussions with its existing and prospective lenders)
could have a material bearing on the Lonmin Directors' assessment of the basis of
preparation of the audited financial statements of Lonmin for the financial year ended 30
September 2017 as a going concern.
In recent months, and in parallel with its work on the Operational Review, the Board of
Lonmin has also been in discussions with Sibanye-Stillwater about a possible offer for
Lonmin. The Board of Lonmin has concluded that the acquisition of Lonmin by Sibanye-
Stillwater represents a comprehensive and more certain solution to the challenges facing
Lonmin than Lonmin could achieve by any alternative route. The Board of Lonmin believes
that a combination of Sibanye-Stillwater and Lonmin creates a larger and more resilient
company, with greater geographical and commodity diversification, that is better able to
withstand short-term commodity price and foreign exchange volatility. The Offer also allows
Lonmin Shareholders to participate in:
- the growth and value creation opportunities of the Enlarged Sibanye-Stillwater
Group;
- the benefits from the realisation of synergies from the combination of Sibanye-
Stillwater and Lonmin; and
- any long-term recovery in the fundamentals of the PGM sector.
In addition, the Board of Lonmin believes that the Offer delivers the best value for Lonmin
Shareholders. Based on the 30 trading day volume weighted average price of R18.67 of
Sibanye-Stillwater Shares on the Johannesburg Stock Exchange for the period ended 13
December 2017 (being the last Business Day prior to the date of this Announcement) and
the exchange rate on that date being R18.056:£1, the Offer values each Lonmin Share at
100.0 pence and represents a premium of approximately:
- 57 per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December
2017; and
- 41 per cent. to the 30 trading day volume weighted average price per Lonmin Share
for the period ended 13 December 2017 of 71.1 pence.
Based on the closing price of R16.11 of a Sibanye-Stillwater Share on the Johannesburg
Stock Exchange on 13 December 2017 and applying the same exchange rate, the Offer
values each Lonmin Share at 86.3 pence and represents a premium of approximately 35
per cent. to the closing price per Lonmin Share of 63.8 pence on 13 December 2017.
The Board of Lonmin believes that there is a significant risk of Lonmin breaching its TNW
financial covenants on 31 March 2018. In this event, in the absence of the Offer or an
alternative material transaction resulting from the Operational Review, Lonmin may be
20
unable to obtain a waiver from its lenders and/or additional liquidity. In these circumstances,
Lonmin is unlikely to be able to repay or refinance its existing facilities while meeting its
working capital requirements and, as a result, Lonmin may be unable to continue as a going
concern at that time. Prior to this Announcement, Lonmin has had encouraging discussions
with representatives of its South African Rand lenders regarding their willingness to grant
further waivers. Immediately following this Announcement, Lonmin intends to engage with
all of its lenders in order to obtain the further waiver of such covenants until completion of
the Acquisition.
Prior to completion of the Acquisition, Lonmin intends to work with Sibanye-Stillwater (to the
extent legally permissible) to ensure that the business continues to address the financial
and operational challenges it faces in the best long-term interests of Lonmin and Lonmin
Shareholders.
5 Lonmin Directors’ recommendations and irrevocable undertakings
The Lonmin Directors, who have been so advised by Gleacher Shacklock, J.P. Morgan
Cazenove and Moshe Capital as to the financial terms of the Offer, consider the terms of the
Offer to be fair and reasonable. In providing advice to the Lonmin Directors, Gleacher
Shacklock, J.P. Morgan Cazenove and Moshe Capital have taken into account the
commercial assessments of the Lonmin Directors.
The Lonmin Directors consider the terms of the Offer to be in the best interests of Lonmin
Shareholders as a whole and intend unanimously to recommend that Lonmin Shareholders
vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the
Lonmin General Meeting which is to be convened to approve the Offer, as the Lonmin
Directors have irrevocably undertaken to Sibanye-Stillwater to do in respect of their own
beneficial shareholdings in Lonmin which amount in aggregate to 75,498 Lonmin Shares,
representing approximately 0.026698 per cent. of the existing issued ordinary share capital
of Lonmin in issue on 13 December 2017 (being the last Business Day prior to the date of
this Announcement).
In the event that the Acquisition is implemented by way of a Takeover Offer, the Lonmin
Directors intend unanimously to recommend that Lonmin Shareholders accept or procure
acceptance of such Takeover Offer. It is the Lonmin Directors’ intention, immediately
following the announcement by Lonmin of its results for the financial year ended 30
September 2017, which will end the closed period to which Lonmin is subject under Article
19(11) of the Market Abuse Regulation as at the date of this Announcement, to undertake
irrevocably to accept or procure the acceptance of such Takeover Offer in respect of their
own holdings of Lonmin Shares.
Further details of these irrevocable undertakings (including the circumstances in which they
will fall away) are set out in Appendix III to this Announcement.
6 Information on Sibanye-Stillwater
The Sibanye-Stillwater Group is a global precious metal mining group, producing a mix of
metals that includes gold and PGMs. Globally, the Sibanye-Stillwater Group is a major
producer of platinum and palladium and features among the world’s top 10 producers of
gold, based on annual production at such operations in 2016.
Domiciled and headquartered in South Africa, Sibanye-Stillwater has a primary listing on the
Main Board of the Johannesburg Stock Exchange and an ADR program traded on the New
21
York Stock Exchange. The Sibanye-Stillwater Group owns and operates a portfolio of high
quality operations and projects, which are managed by regions: (i) the Southern African
region; and (ii) the United States region.
The Southern African region houses the gold and PGM operations and projects located in
South Africa and Zimbabwe. These include the underground and surface gold mining
operations in South Africa, being the Cooke Operations, Driefontein Operations and Kloof
Operations in the West Witwatersrand region of Gauteng Province and the Beatrix
Operation in the Free State Province. The Sibanye-Stillwater Group owns 74 per cent. of the
Cooke Operations, with BBBEE stakeholders owning the remaining 26 per cent. The
Sibanye-Stillwater Group also owns and manages significant gold extraction and processing
facilities where ore is treated and beneficiated to produce gold doré. In addition, several
organic projects that are currently underway are aimed at sustaining these gold mining
operations into the long-term. The Sibanye-Stillwater Group’s PGM assets in the Southern
African region are a 50 per cent. interest in the Kroondal Operations, a 91.7 per cent.
interest in Platinum Mile and the Rustenburg Operations (of which the Sibanye-Stillwater
Group owns 74 per cent. with the BBBEE stakeholders owning the remaining 26 per cent.)
in the North West Province in South Africa, and a 50 per cent. indirect interest in the Mimosa
Operations in Zimbabwe.
The United States region houses the Sibanye-Stillwater Group’s PGM operations and
projects located in the United States, Canada and Argentina. These include the Stillwater
Mine and East Boulder Mine and the Blitz Project in Montana, as well as two exploration-
stage projects, Marathon (a PGM-copper porphyry in Ontario, Canada) and Altar (a copper-
gold property in San Juan, Argentina). Assets in the United States region also include the
Columbus Metallurgical Complex in Montana. This Complex houses the concentrator and
smelter facilities as well as a base metal refinery, which produces a PGM-rich filter cake that
is further refined by a third-party precious metal refinery. These processing and metallurgical
facilities are also used to process recycled material, such as spent autocatalytic convertors
and petroleum refinery catalysts.
Sibanye-Stillwater supports the acceleration of the social and economic transformation of
the South African mining industry. Sibanye-Stillwater has successfully concluded a number
of BBBEE transactions that have resulted in empowering a broad-based group of South
African citizens and believes that it is currently fully empowered under the MPRDA and the
Mining Charter. Sibanye-Stillwater is supportive of Lonmin’s empowerment structure and will
be engaging with Lonmin’s BEE stakeholders following this Announcement.
In the financial year ended 31 December 2016, Sibanye-Stillwater generated R31.241 billion
in revenue, operating profit of R6.490 billion and net profit of R3.271 billion.
As at 13 December 2017 (being the last Business Day prior to the date of this
Announcement), Sibanye-Stillwater had a market capitalisation of R34.9 billion
(approximately £1.9 billion).
7 Information on Lonmin
The Lonmin Group is a primary producer of PGMs and engages in the discovery, extraction,
refining and marketing of PGMs. The Lonmin Group operates a vertically integrated
business model with an established infrastructure.
Lonmin is a public limited company registered in England and Wales. Lonmin has a primary
listing on the premium segment of the Official List of the London Stock Exchange and a
22
secondary listing on the Main Board of the Johannesburg Stock Exchange. Lonmin also has
a sponsored ADR program for which Bank of New York Mellon acts as the depositary. Each
Lonmin ADS represents one ordinary share of Lonmin. The Lonmin ADSs trade on the
Over-The-Counter market in the United States.
The Lonmin Group’s revenue-generating operations are located in the Bushveld Igneous
Complex in South Africa. The Lonmin Group’s core mining operations, comprising 11 shafts
and inclines in total, are located at Marikana, on the western limb of the Bushveld Igneous
Complex in the North West Province, and contributed 97.7 per cent. (on an attributable
basis) of its total mined production for the year ended 30 September 2016. The Lonmin
Group also operates an adjoining property known as Pandora, which has recently been
incorporated into the wider Marikana operations. The Lonmin Group owns a further PGM
mine located in the Limpopo Province, which was placed on care and maintenance in March
2009.
The Lonmin Group has PGM exploration and development projects in various other
locations. These include Akanani, which is located in Limpopo Province and three joint
ventures covering 36 properties in the Sudbury Basin in Ontario, Canada.
The Lonmin Group has its PGM processing facilities at Marikana and Brakpan, with an
annual platinum capacity of 1.5Moz.
As at 30 September 2016, the Lonmin Group had 180.6Moz of mineral resources of
platinum, palladium, rhodium and gold (comprising 7.3Moz of measured resources,
102.6Moz of indicated resources and 70.7Moz of inferred resources), including 101.0Moz of
platinum resources (comprising 4.6Moz of measured platinum resources, 56.7Moz of
indicated platinum resources and 39.7Moz of inferred platinum resources). Total refined 6E
production for the financial year ended 30 September 2016 was 741,890 ounces of platinum
and 1,440,724 ounces of PGMs in total.
In the financial year ended 30 September 2016, Lonmin generated US$1,118 million in
revenue, underlying operating profit of US$7 million and operating loss of US$322 million
and as at that date had total assets of US$2,018 million.
As at close of business on 12 December 2017 (being the last practicable date prior to the
date of this Announcement), the Lonmin Group had 24,617 full-time employees and utilised
a further 8,063 contractors.
8 Directors, management, employees and locations
Lonmin
As noted in paragraph 4 of this Announcement, and which Lonmin believes it has in
common with several other South African platinum mining companies, Lonmin’s business
has experienced ongoing financial constraints for a number of years caused by a range of
external factors such as a persistently low PGM pricing environment and the inflationary
cost pressures of operating in the South African PGM industry, which have been further
exacerbated by internal factors including operational, social and labour issues.
The Board of Lonmin believes that if these low prices persist, in addition to the drop-off in
production profile of the ageing Generation One shafts, and regardless of whether or not the
Acquisition is implemented, potentially in excess of 12,000 jobs in Lonmin would be at risk
over the next three years.
23
Lonmin continuously engages with its workforce through future forums in order to manage
and mitigate the risk of job losses and of placing mines on care and maintenance. Through
these future forums Lonmin also communicates the economic and operational realities of its
business to its workforce and discusses the efficiencies it seeks in order to mitigate job
losses.
In connection with the outcomes of the Operational Review, Lonmin expects that it will be
necessary to place its ageing Generation One shafts, which are at the end of their reserve
lives, on care and maintenance. It is anticipated that these steps would be accompanied by
associated overhead savings to contain operational costs.
Lonmin’s evolving business plan will possibly result in headcount reductions associated with
placing shafts on care and maintenance and this process has commenced in accordance
with South African laws and in consultation with employee representative bodies. The
placing of the Generation One shafts on care and maintenance, together with the
operational efficiency improvement program which commenced in 2015, could impact
approximately 3,700 employees (including approximately 800 contractors) in 2018. Placing
further Generation One shafts on care and maintenance in 2019 could impact approximately
a further 4,800 operational employees (including approximately 2,000 contractors). This
potential reduction in the operational base would necessitate the downscaling of overhead
and support services, placing approximately a further 500 employees possibly at risk of job
losses. While the impact on possible job losses in the first two years is primarily driven by
placing high-cost and depleting Generation One shafts on care and maintenance,
forecasting the potential impact on employment beyond a two year period is dependent on
future commodity prices and business liquidity. However, should commodity prices remain in
their current depressed state for a further three years an additional estimated 3,600 jobs
could be at risk in 2020.
Enlarged Sibanye-Stillwater Group
Sibanye-Stillwater has reviewed Lonmin’s evolving business plan and concurs that the
restructuring is necessary as mining operations reach the end of their reserve lives.
The Boards of Sibanye-Stillwater and Lonmin recognise that the integration of Lonmin into
the Enlarged Sibanye-Stillwater Group will create the opportunity to achieve the expected
synergistic benefits of the Acquisition, enhancing the potential longer term sustainability of
Lonmin’s remaining (excluding the Generation One shafts) operations. In addition to
benefitting ongoing operating costs, this integration will also result in creating flexibility
associated with the timing of the significant capital investment that would be required to
develop the next generation operating shafts to sustain mining output from Lonmin’s
operations.
The synergy work carried out to date has confirmed the potential to generate cost-savings
for the Enlarged Sibanye-Stillwater Group. Although Sibanye-Stillwater continues to develop
an initial business plan for the Enlarged Sibanye-Stillwater Group, it estimates that
headcount reductions of approximately 890 (including approximately 320 contactors)
employees not envisaged in the Lonmin evolving business plan for 2018 to 2020 could be
required. These reductions include approximately 700 employees from the Enlarged
Sibanye-Stillwater Group in executive functions, management and centralised roles in areas
of overlapping corporate and support functions (including in respect of shared services,
management, marketing, mining services, corporate and regulatory costs).
24
Finalisation of the business plan for the Enlarged Sibanye-Stillwater Group and integration
planning will follow a transparent and detailed review of the Lonmin Group’s business and
will be conducted in line with the regulatory processes in South Africa, which include
engagement and consultation with employees and their representative bodies. The
implementation of any such restructuring would seek to identify and retain the best talent
from both Sibanye-Stillwater and Lonmin.
The non-executive Lonmin Directors will resign from the Board of Lonmin upon completion
of the Acquisition.
Lonmin’s operational headquarters
Sibanye-Stillwater expects to retain Lonmin’s operational headquarters in Marikana, but
recognises that opportunities exist to rationalise premises and final locations of the Enlarged
Sibanye-Stillwater Group. A thorough assessment will be undertaken in this regard following
completion of the Acquisition. It is expected that the Enlarged Sibanye-Stillwater Group’s
global corporate office will remain in Johannesburg and that Lonmin’s office in London will
close.
The contractual and statutory employment rights, including in relation to pensions, of all
Sibanye-Stillwater and Lonmin employees will be fully observed in accordance with
applicable law following completion of the Acquisition.
9 Lonmin Share Plans
Participants in Lonmin Share Plans will be contacted regarding the effect of the Offer on
their rights under the Lonmin Share Plans and appropriate proposals will be made to such
participants in due course. Further details of the terms of such proposals will be included in
the Scheme Document and in separate letters to be sent to participants in the Lonmin Share
Plans.
10 Lonmin’s credit facilities
The Lonmin Group has in place two credit facilities with a number of banks. The aggregate
amount outstanding under these credit facilities is approximately US$150 million. Lonmin
will fully prepay and cancel all of such credit facilities at, or immediately prior to, completion
of the Acquisition.
In addition, as at 12 December 2017 (being the last practicable date prior to the date of this
Announcement), the Lonmin Group maintains a net cash position, such that the total value
of the cash (including cash equivalents and other liquid assets) available to the Lonmin
Group exceeds the total value of the debts and liabilities of the Lonmin Group. Lonmin
intends to notify Sibanye-Stillwater in writing if, at any time prior to the Longstop Date, the
Lonmin Group moves, or anticipates that it will move, to a net debt position such that the
total value of the Lonmin Group’s debts and liabilities exceeds the total value of the cash
(including cash equivalents and other liquid assets) available to the Lonmin Group.
11 Structure of and Conditions to the Offer
It is intended that the Offer will be effected by means of a Court-approved scheme of
arrangement between Lonmin and Lonmin Shareholders under Part 26 of the UK
Companies Act.
25
The purpose of the Scheme is to provide for Sibanye-Stillwater to become the holder of the
entire issued and to be issued ordinary share capital of Lonmin. This is to be achieved by
the transfer of the Lonmin Shares to Sibanye-Stillwater, in consideration for which the
Lonmin Shareholders will receive the New Sibanye-Stillwater Shares on the basis set out in
paragraph 2 of this Announcement.
The Offer is subject to the Conditions and further terms set out below and in Appendix I to
this Announcement and to be set out in the Scheme Document and the Forms of Proxy and
will only become effective if, among other things, the following events occur on or before 28
February 2019 or such later date as may be agreed in writing by Sibanye-Stillwater and
Lonmin (with the Panel’s consent and as the Court may approve (if such approval(s) are
required)):
(i) the approval of the Scheme by a majority in number of the Lonmin Shareholders
who are present and vote (and are entitled to vote), whether in person or by proxy,
at the Court Meeting and who represent 75 per cent. in value of the Lonmin Shares
voted by those Lonmin Shareholders;
(ii) the resolutions required to implement the Scheme being duly passed by Lonmin
Shareholders representing the requisite majority or majorities of votes cast at the
Lonmin General Meeting (or at any adjournment of that meeting);
(iii) the approval of the Scheme by the Court (with or without modification, but subject
to any modification being on terms acceptable to Lonmin and Sibanye-Stillwater);
(iv) the delivery of a copy of the Court Order to the Registrar of Companies;
(v) certain competition and regulatory approvals (including in South Africa and the
United Kingdom (or the European Union, in case a referral is made to the
European Commission pursuant to Article 22 of the Council Regulation (EC)
139/2004) being obtained;
(vi) the Licences Condition, as described below, not being invoked;
(vii) the resolution of Sibanye-Stillwater Shareholders to allot and issue the New
Sibanye-Stillwater Shares in connection with the Offer being duly passed by
Sibanye-Stillwater Shareholders representing more than 50 per cent. of the voting
rights exercised on the ordinary resolution at the Sibanye-Stillwater Shareholder
Meeting (or at any adjournment of that meeting); and
(viii) the New Sibanye-Stillwater Shares being admitted to trading on the Johannesburg
Stock Exchange.
The Offer will lapse if:
- the Court Meeting and the Lonmin General Meeting are not held on or before the
nd
22 day after or the expected date of the Court Meeting and the Lonmin General
Meeting to be set out in the Scheme Document in due course (or such later date as
may be agreed between Sibanye-Stillwater and Lonmin);
nd
- the Court hearing to approve the Scheme is not held on or before the 22 day after
the expected date of the Court sanction hearing to be set out in the Scheme
Document in due course (or such later date as may be agreed between Sibanye-
Stillwater and Lonmin); or
- the Scheme does not become effective by the Longstop Date,
26
provided, however, that the deadlines for the timing of the Court Meeting, the Lonmin
General Meeting and the Court hearing to approve the Scheme as set out above may be
waived by Sibanye-Stillwater, and the deadline for the Scheme to become effective may be
extended by agreement between Lonmin and Sibanye-Stillwater.
Sibanye-Stillwater and Lonmin have agreed in principle that if the Acquisition does not
complete as a result of Sibanye-Stillwater Shareholders not passing the resolution to be
proposed in connection with the Acquisition at the Sibanye-Stillwater Shareholder Meeting,
Sibanye-Stillwater and Lonmin will, at Lonmin’s option, enter into good faith discussions to
enter into an asset transaction as envisaged as part of the Operational Review pursuant to
which Sibanye-Stillwater would acquire Lonmin assets of sufficient quantum to ensure
Lonmin could continue to operate as a going concern in the medium term. Such an
arrangement would be subject to all necessary approvals including by Lonmin
Shareholders.
The Licences Condition is specifically drawn to the attention of Lonmin Shareholders. It is a
Condition of the Offer that, following the date of this Announcement, there is no cancellation
of any prospecting right or mining right held by a member of the Wider Lonmin Group
pursuant to Section 47 of the MPRDA where such cancellation is material in the context of
the Wider Lonmin Group taken as a whole, and if such a cancellation has occurred it has
not been: (i) withdrawn, lifted or revoked in writing by the Minister; or (ii) set aside, nullified
or otherwise suspended by the order of a court of competent jurisdiction, within 15 Business
Days of such cancellation (or, if earlier, by the date scheduled for the Court hearing to
approve the Scheme).
Subject to satisfaction (or waiver, where applicable) of the Conditions, the Scheme is
expected to become effective in the second half of 2018.
Upon the Scheme becoming effective, it will be binding on all Lonmin Shareholders,
irrespective of whether or not they attended or voted at the Court Meeting or the Lonmin
General Meeting.
Further details of the Scheme, including an indicative timetable for its implementation, will
be set out in the Scheme Document.
12 Lonmin dividends
The Exchange Ratio assumes that Lonmin Shareholders will not receive any dividend after
the date of this Announcement. If any dividend or other distribution is authorised, declared,
made or paid in respect of Lonmin Shares on or after the date of this Announcement, the
Exchange Ratio will be adjusted downwards on an equivalent basis to reflect the amount of
any such dividend or other distribution.
13 Fractional entitlements
Fractions of New Sibanye-Stillwater Shares will not be issued pursuant to the Offer.
Entitlements to New Sibanye-Stillwater Shares pursuant to the Offer will be rounded down
to the nearest whole number of New Sibanye-Stillwater Shares.
27
14 Admission of New Sibanye-Stillwater Shares and de-listing of Lonmin Shares
The New Sibanye-Stillwater Shares will, when issued, be ordinary shares in the authorised
capital of Sibanye-Stillwater each with no par value, will be fully paid and rank pari passu in
all respects with the Sibanye-Stillwater Shares in issue at the date of this Announcement.
It is expected that Admission of the New Sibanye-Stillwater Shares to the Main Board of the
Johannesburg Stock Exchange will become effective and dealings for normal settlement in
the New Sibanye-Stillwater Shares will commence at or shortly after 9.00 am
(Johannesburg time) on the Admission Date.
Prior to the Scheme becoming effective on the Effective Date, Lonmin will make an
application for the cancellation of listing of the Lonmin Shares on the Official List and trading
on the Main Market of the London Stock Exchange and for a removal from the Main Board
of the Johannesburg Stock Exchange, which is expected to take effect with regard to the
Official List and the Main Market of the London Stock Exchange from the Admission Date
and with regard to the Main Board of the Johannesburg Stock Exchange from the Business
Day after the Admission Date.
The last day of dealings in Lonmin Shares on the Main Market of the London Stock
Exchange is expected to be the Business Day immediately prior to the Effective Date and
no transfers will be registered after 6.00 pm (London time) on that date. The last day of
dealings in Lonmin Shares on the board of the Johannesburg Stock Exchange is expected
to be the fourth Business Day prior to the Admission Date and no transfers shall be
registered after 5.00 pm (Johannesburg time) on that date.
From the first Business Day following the Effective Date, share certificates in respect of the
Lonmin Shares will cease to be held within the CREST and STRATE systems and will be
cancelled.
It is also proposed that, following the Effective Date and after the Lonmin Shares are de-
listed, Lonmin will be re-registered as a private limited company.
15 Share dealing facility
Subject to clarifying any legal or regulatory requirements or restrictions and subject to Panel
consent, Sibanye-Stillwater intends to offer a dealing facility to certain retail Lonmin
Shareholders under which the New Sibanye-Stillwater Shares to which such Lonmin
Shareholders become entitled may be sold for their benefit. Details of any such dealing
facility will be included in the Scheme Document.
16 Lonmin American Depositary Shares
Lonmin ADS holders will not be entitled to vote directly on the Scheme and the Offer.
However, Lonmin ADS holders have the right to instruct the Lonmin Depositary how to vote
the Lonmin Shares in respect of the Lonmin Shares underlying the Lonmin ADSs, subject to
and in accordance with the terms of the Deposit Agreement. Lonmin ADS holders should
take particular notice of the deadline for providing voting instructions, which may be earlier
than that applicable to holders of Lonmin Shares.
Lonmin ADS holders that wish to vote directly on the Scheme and the Offer must surrender
their Lonmin ADSs to the Lonmin Depositary, pay the Lonmin Depositary’s fees and charges
in accordance with the Deposit Agreement and become holders of Lonmin Shares prior to
the Scheme Voting Record Time, and in each case subject to and in accordance with the
28
terms of the Deposit Agreement. Lonmin ADS holders that wish to vote directly on the
Scheme should take care to surrender their Lonmin ADSs in time to permit processing to be
completed by the Lonmin Depositary and its English custodian prior to the Scheme Voting
Record Time. If you hold Lonmin ADSs through a broker or other securities intermediary,
you should contact the intermediary to determine the date by which you must instruct that
intermediary to act in order that the necessary processing can be completed in time.
17 Offer-related arrangements
Confidentiality Agreement
Sibanye-Stillwater and Lonmin entered into a confidentiality and standstill agreement on 18
October 2017 (the “Confidentiality Agreement”) pursuant to which each of Sibanye-
Stillwater and Lonmin has undertaken to keep confidential information relating to the other
party, not to disclose it to third parties (other than to permitted disclosees) unless required
by law or regulation and only use it in connection with the Acquisition. These confidentiality
obligations will remain in force until completion of the Acquisition or, in the event of
termination of the Acquisition, for a period of two years from the date of the Confidentiality
Agreement. Sibanye-Stillwater also agreed to certain standstill undertakings, all of which
ceased to apply upon the release of this Announcement.
The Confidentiality Agreement also contains undertakings from both Lonmin and Sibanye-
Stillwater that, for a period of 18 months from the date of the Confidentiality Agreement,
neither Sibanye-Stillwater nor Lonmin will, directly or indirectly, solicit or entice away certain
persons employed or engaged by the other party or any of its affiliates with a view to
inducing those employees to leave such employment or engagement, nor, directly or
indirectly solicit, entice away, canvass or approach certain suppliers or customers of the
other party or any of its affiliates for the purpose of offering or receiving goods or services of
the same or similar type from or to such person.
Co-operation Agreement
Sibanye-Stillwater and Lonmin have entered into the Co-operation Agreement dated 14
December 2017, pursuant to which, among other things, Sibanye-Stillwater has agreed to
lead in developing, preparing and submitting all filings, notifications or submissions in
relation to all clearances and regulatory conditions with respect to the Acquisition, except to
the extent that: (i) Lonmin is required to make its own filings, notifications or submissions (in
which case Lonmin will submit such filings, notifications or submissions); or (ii) Sibanye-
Stillwater and Lonmin are required to make joint filings, notifications or submissions (in
which case Sibanye-Stillwater and Lonmin will jointly submit such filings, notifications or
submissions). Sibanye-Stillwater and Lonmin have also agreed to provide such information
and assistance as the other party may reasonably request for the purpose of obtaining all
regulatory clearances.
The Co-operation Agreement also records Sibanye-Stillwater and Lonmin's intention to
implement the Acquisition by way of the Scheme, subject to Sibanye-Stillwater having the
right to implement the Acquisition by way of a Takeover Offer in certain circumstances. The
Co-operation Agreement also provides that Sibanye-Stillwater will consult Lonmin in relation
to the preparation of the Sibanye-Stillwater Circular. Sibanye-Stillwater has also agreed to
provide promptly to Lonmin all such information relating to Sibanye-Stillwater and
assistance as Lonmin may reasonably request for the purpose of preparing the Scheme
Document (and/or other Lonmin shareholder documentation).
29
The Co-operation Agreement also includes undertakings by Sibanye-Stillwater to: (i)
convene the Sibanye-Stillwater Shareholder Meeting, which is expected to be held at or
around the same time as the Lonmin General Meeting, as soon as reasonably practicable
following the receipt of all the relevant clearances from the competition and regulatory
authorities, in particular those in South Africa and the United Kingdom (or, if applicable, the
European Union (in case a referral is made to the European Commission pursuant to Article
22 of Council Regulation (EC) 139/2004)) (unless Sibanye-Stillwater and Lonmin otherwise
agree); and (ii) recommend that Sibanye-Stillwater Shareholders vote in favour of the
relevant resolution at the Sibanye-Stillwater Shareholder Meeting.
Lonmin and Sibanye-Stillwater have agreed that the Co-operation Agreement will terminate
in the following circumstances:
(i) the Scheme is withdrawn or lapses prior to the Longstop Date, other than where
such lapse or withdrawal: (a) is a result of Sibanye-Stillwater exercising its right to
implement the Acquisition by way of a Takeover Offer; or (b) either is not confirmed
by Sibanye-Stillwater or is followed within five Business Days by an announcement
under Rule 2.7 of the Takeover Code made by Sibanye-Stillwater (or a person acting
in concert with it) to implement the Acquisition by way of different offer or scheme or
arrangement on substantially the same or improved terms);
(ii) the Lonmin Directors fail to recommend that Lonmin Shareholders vote in favour of
the Scheme in the Scheme Document or they withdraw, qualify or modify the
recommendation in an adverse manner or announce an intention to do so prior to
the Court Meeting and the Lonmin General Meeting and Sibanye-Stillwater elects to
terminate the Co-operation Agreement;
(iii) if Sibanye-Stillwater elects to exercise its right to implement the Acquisition by way
of a Takeover Offer, the Lonmin Directors withdraw, qualify or modify their
recommendation of the Takeover Offer in an adverse manner or announce an
intention to do so and Sibanye-Stillwater elects to terminate the Co-operation
Agreement;
(iv) the Scheme does not become effective before the Longstop Date, or if Sibanye-
Stillwater elects to exercise its right to implement the Acquisition by way of a
Takeover Offer and the Takeover Offer does not become wholly unconditional before
the Longstop Date; or
(v) Sibanye-Stillwater and Lonmin agree in writing to such termination.
The Co-operation Agreement also contains provisions that will apply in respect of Lonmin
Share Plans, including that Lonmin has agreed that it will not process or issue any Lonmin
Shares to satisfy the exercise of any options granted under the Lonmin Share Plans
between the Scheme Voting Record Time and the Effective Date.
Regulatory Clean Team Protocol
Sibanye-Stillwater and Lonmin have put in place a Regulatory Clean Team Protocol which
sets out how confidential information that is competitively sensitive can be disclosed, used,
or shared between Sibanye-Stillwater’s external legal counsel and/or economists and
Lonmin’s external legal counsel and/or economists for the purposes of obtaining the consent
of competition authorities and/or other regulatory clearances in connection with the Offer.
30
Due Diligence Clean Team Protocol
In addition, Sibanye-Stillwater and Lonmin have put in place a Due Diligence Clean Team
Protocol which sets out how certain other confidential information that is competitively
sensitive can be disclosed, used or shared between Sibanye-Stillwater and Lonmin and
their professional advisers for the purposes of due diligence, synergies determination,
evaluation, planning transition and regulatory clearances in connection with the Offer.
18 Opening Position Disclosure of interests in Lonmin
As at the close of business on 13 December 2017 (being the last Business Day prior to the
date of this Announcement) neither Sibanye-Stillwater, nor any of its directors, nor, so far as
Sibanye-Stillwater is aware, any person acting in concert (within the meaning of the
Takeover Code) with it has: (i) any interest in or right to subscribe for any relevant securities
of Lonmin; or (ii) any short positions in respect of relevant Lonmin Shares (whether
conditional or absolute and whether in the money or otherwise), including any short position
under a derivative, any agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery: or (iii) borrowed or lent any relevant Lonmin
Shares (including, for these purposes, any financial collateral arrangements of the kind
referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares
which had been either on-lent or sold.
“Interests in securities”, for these purposes, arise, in summary, when a person has long
economic exposure, whether absolute or conditional, to changes in the price of securities
(and a person who only has a short position in securities is not treated as interested in those
securities). In particular, a person will be treated as having an “interest” by virtue of the
ownership, voting rights or control of securities, or by virtue of any agreement to purchase,
option in respect of, or derivative referenced to, securities.
It has not been practicable for Sibanye-Stillwater to make enquiries of all of its concert
parties in advance of the release of this Announcement. Therefore, all relevant details in
respect of Sibanye-Stillwater’s concert parties will be included in the Opening Position
Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code.
19 General
The Scheme Document and the Forms of Proxy accompanying the Scheme Document will
be published in due course around the time that all relevant clearances from the competition
and regulatory authorities, in particular those in South Africa and the United Kingdom (or, if
applicable, the European Union, in case a referral is made to the European Commission
pursuant to Article 22 of Council Regulation (EC) 139/2004), have been received. The
Scheme Document and Forms of Proxy will be made available to all Lonmin Shareholders
at no charge to them.
The Sibanye-Stillwater Circular, containing (amongst other things) the notice of the Sibanye-
Stillwater Shareholder Meeting (including the resolution to be adopted by the Sibanye-
Stillwater Shareholders), together with the Forms of Proxy, will be posted to Sibanye-
Stillwater Shareholders at or around the same time as the Scheme Document is published.
The Sibanye-Stillwater Circular will be made available in due course by Sibanye-Stillwater
on its website at www.sibanyestillwater.com/investors/transactions/lonmin and by Lonmin on
its website at www.lonmin.com/investors/sibanye-stillwater-offer.
31
Sibanye-Stillwater reserves the right to elect (subject to the consent of the Panel) to
implement the Acquisition of the Lonmin Shares by way of a takeover offer as an alternative
to the Scheme. In such event, the Acquisition will be implemented on substantially the same
terms as those which would apply to the Scheme (subject to appropriate amendments,
including an acceptance condition set at 90 per cent. of the Lonmin Shares to which such
offer relates or such lesser percentage, being more than 50 per cent., as Sibanye-Stillwater
may decide or the Panel may require).
The Offer will be made on the terms and subject to the Conditions and further terms set out
in Appendix I to this Announcement and included in the Scheme Document. The bases and
sources of financial information and bases of calculations contained in this Announcement
are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings
is contained in Appendix III to this Announcement. Appendix IV to this Announcement
contains details of and bases of calculation of the anticipated financial benefits of the Offer.
Certain terms used in this Announcement are defined in Appendix V to this Announcement.
UBS, HSBC, Qinisele Resources, BDO, Gleacher Shacklock, J.P. Morgan Cazenove,
Moshe Capital and Greenhill have each given and not withdrawn their consent to the
publication of this Announcement, with the inclusion herein of the references to their names
in the form and context in which they appear.
There will be an investor and analyst presentation at 11.00 am (Johannesburg time) at the
Johannesburg Stock Exchange, One Exchange Square, Gwen Lane, Sandown, Sandton,
2196, South Africa, on 14 December 2017. There will be a live webcast of the investor and
analyst presentation available on Sibanye-Stillwater’s website at
www.sibanyestillwater.com/investors/transactions/lonmin and on Lonmin’s website at
www.lonmin.com/investors/sibanye-stillwater-offer.
The recorded briefing and the accompanying slides will be available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on Sibanye-Stillwater’s
website at www.sibanyestillwater.com/investors/transactions/lonmin and on Lonmin’s
website at www.lonmin.com/investors/sibanye-stillwater-offer.
20 Documents available on website
Copies of the following documents will be made available in due course on Sibanye-
Stillwater’s and Lonmin’s websites at
www.sibanyestillwater.com/investors/transactions/lonmin and
www.lonmin.com/investors/sibanye-stillwater-offer, respectively, until the Effective Date:
- this Announcement;
- the irrevocable undertakings referred to in paragraph 5 above and summarised in
Appendix III to this Announcement; and
- any Offer-related arrangement or other agreement, arrangement or commitment
permitted under, or excluded from Rule 21.2 of the Takeover Code referred to in
paragraph 17 above.
32
Enquiries:
Sibanye-Stillwater
James Wellsted, SVP Investor Relations +27 10 493 6914
UBS (Financial Adviser to Sibanye-Stillwater)
London: Ian Hart +44 (0) 20 7568 8000
Sandip Dhillon
South Africa: Gary Hudson +27 11 322 7000
HSBC (Financial Adviser to Sibanye-Stillwater) +44 (0) 20 7991 8096
Laurent Charbonnier
Gloria Leung
Qinisele Resources (Corporate Adviser to Sibanye-Stillwater) +27 11 883 6358
Dennis Tucker
Andrew Brady
Lonmin
Tanya Chikanza, Group Head: Corporate Strategy & Investor +27 11 218 8358
Relations +44 (0) 20 3908 1073
Gleacher Shacklock (Financial Adviser to Lonmin) +44 (0) 20 7484 1150
Dominic Lee
Jan Sanders
Paul Finlayson
J.P. Morgan Cazenove (Financial Adviser and Corporate Broker +44 (0) 20 7742 4000
to Lonmin)
Michael Wentworth-Stanley
Dimitri Reading-Picopoulos
Henry Capper
Moshe Capital (Financial Adviser to Lonmin) +27 11 783 9986
Mametja Moshe
Konosoang Asare-Bediako
Cardew Group (Public Relations Adviser to Lonmin) +44 (0) 20 7930 0777
Anthony Cardew +44 7770 720 389
David Roach
33
Linklaters LLP is acting as legal adviser to Sibanye-Stillwater in the United Kingdom and the
United States and Edward Nathan Sonnenbergs Incorporated is acting as legal adviser to
Sibanye-Stillwater in South Africa. Herbert Smith Freehills LLP is acting as legal adviser to Lonmin
in the United Kingdom and Cliffe Dekker Hofmeyr Incorporated is acting as legal adviser to Lonmin
in South Africa. Greenhill is acting as financial restructuring adviser to Lonmin.
Important notices
UBS Limited is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority in the UK and UBS South Africa (Pty) Ltd is registered with the Financial
Services Board in South Africa (collectively “UBS”). UBS is acting exclusively as financial adviser
to Sibanye-Stillwater and no one else in connection with the Offer and shall not be responsible to
anyone other than Sibanye-Stillwater for providing the protections afforded to clients of UBS nor
for providing advice in relation to such matters.
HSBC, which is authorised by the Prudential Regulation Authority and regulated in the UK by the
Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively as
financial adviser to Sibanye-Stillwater and no one else in connection with the Offer and shall not
be responsible to anyone other than Sibanye-Stillwater for providing the protections afforded to
clients of HSBC nor for providing advice in connection with the Offer or any matter referred to
herein.
Qinisele Resources is acting exclusively as corporate adviser to Sibanye-Stillwater and no one
else in connection with the Offer and shall not be responsible to anyone other than Sibanye-
Stillwater for providing the protections afforded to clients of Qinisele Resources nor for providing
advice in connection with the Offer or any matter referred to herein.
Gleacher Shacklock LLP (“Gleacher Shacklock”), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser to
Lonmin and no one else in connection with the matters set out in this Announcement and will not
be responsible to anyone other than Lonmin for providing the protections afforded to clients of
Gleacher Shacklock or for providing advice in connection with the subject matter of this
Announcement or any other matter referred to herein.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan
Cazenove (“J.P. Morgan Cazenove”), is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United
Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to Lonmin and no one
else in connection with the matters set out in this Announcement and will not regard any other
person as its client in relation to the matters set out in this Announcement and will not be
responsible to anyone other than Lonmin for providing the protections afforded to clients of J.P.
Morgan Cazenove or its affiliates, or for providing advice in relation to the contents of this
Announcement or any other matter referred to herein.
Moshe Capital, which is an Authorised Financial Services provider and regulated in South Africa
by the Financial Services Board, is acting exclusively as financial adviser to Lonmin and no one
else in connection with the Offer and shall not be responsible to anyone other than Lonmin for
providing the protections afforded to clients of Moshe Capital nor for providing advice in
connection with the Offer or any matter referred to herein.
Greenhill, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting
exclusively as financial restructuring adviser to Lonmin and no one else in connection with ongoing
discussions with its existing lenders and shall neither be responsible to anyone other than Lonmin
34
for providing the protections afforded to clients of Greenhill nor for providing advice in connection
with ongoing discussions with Lonmin’s existing lenders or any matter referred to herein.
Further information
This Announcement is for information purposes only. It is not intended to and does not constitute,
or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval
in any jurisdiction, pursuant to the Offer or otherwise, nor will there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of applicable law.
The Offer will be made solely by means of the Scheme Document which, together with the Forms
of Proxy, will contain the full terms and conditions of the Offer including details of how to vote in
respect of the Offer.
This Announcement has been prepared for the purpose of complying with English law and the
Takeover Code and the information disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with the laws and regulations of
jurisdictions outside the United Kingdom.
Sibanye-Stillwater will prepare the Sibanye-Stillwater Circular to be distributed to Sibanye-
Stillwater Shareholders. Lonmin will prepare the Scheme Document to be distributed to Lonmin
Shareholders. Sibanye-Stillwater urges Lonmin Shareholders to read the Scheme Document
carefully when it becomes available because it will contain important information in relation to the
Offer, the New Sibanye-Stillwater Shares and the Enlarged Sibanye-Stillwater Group. Sibanye-
Stillwater urges Sibanye-Stillwater Shareholders to read the Sibanye-Stillwater Circular when it
becomes available because it will contain important information in relation to the New Sibanye-
Stillwater Shares. Any vote in respect of the resolutions to be proposed at the Court Meeting, the
Lonmin General Meeting and the Sibanye-Stillwater Shareholder Meeting to approve the Offer or
the allotment and issue of the New Sibanye-Stillwater Shares (as applicable) and related matters,
should be made only on the basis of the information contained in the Scheme Document and, in
the case of Sibanye-Stillwater Shareholders, the Sibanye-Stillwater Circular.
This Announcement does not constitute a prospectus or prospectus equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to
comply with the applicable requirements may constitute a violation of the laws of any such
jurisdiction.
The Offer relates to shares of a UK company and is proposed to be effected by means of a
scheme of arrangement under the laws of England and Wales. A transaction effected by means of
a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US
Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and
practices applicable in the United Kingdom to schemes of arrangement, which differ from the
requirements of US proxy solicitation or tender offer rules. However, if Sibanye-Stillwater were to
elect to implement the Offer by means of a takeover offer, such takeover offer will be made in
compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange
Act and Regulation 14E thereunder. Such a takeover would be made in the United States by
Sibanye-Stillwater and no one else. In addition to any such takeover offer, Sibanye-Stillwater,
certain affiliated companies and the nominees or brokers (acting as agents) may make certain
35
purchases of, or arrangements to purchase, shares in Lonmin outside such takeover offer during
the period in which such takeover offer would remain open for acceptance. If such purchases or
arrangements to purchase were to be made they would be made outside the United States and
would comply with applicable law, including the US Exchange Act. Any information about such
purchases will be disclosed as required in the UK, will be reported to a Regulatory Information
Service of the UKLA and will be available on the London Stock Exchange website:
www.londonstockexchange.com.
Unless otherwise determined by Sibanye-Stillwater or required by the Takeover Code, and
permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into
or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the
Offer will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies
of this Announcement and all documents relating to the Offer are not being, and must not be,
directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from
a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons
receiving this Announcement and all documents relating to the Offer (including custodians,
nominees and trustees) must not mail or otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that jurisdiction.
The availability of the Offer to Lonmin Shareholders who are not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who
are not resident in the United Kingdom should inform themselves of, and observe, any applicable
requirements.
The New Sibanye-Stillwater Shares may not be offered, sold or delivered, directly or indirectly, in,
into or from any Restricted Jurisdiction or to, or for the account or benefit of, any Restricted
Overseas Persons except pursuant to an applicable exemption from, or in a transaction not
subject to, applicable securities laws of those jurisdictions.
The New Sibanye-Stillwater Shares, which will be issued in connection with the Offer, have not
been, and will not be, registered under the US Securities Act or under the securities law of any
state, district or other jurisdiction of the United States. Accordingly, the New Sibanye-Stillwater
Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or
indirectly, in or into or from the United States absent registration under the US Securities Act or an
exemption therefrom. The New Sibanye-Stillwater Shares are expected to be issued in reliance
upon the exemption from the registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. Lonmin Shareholders (whether or not US persons) who are or will be
affiliates (within the meaning of the US Securities Act) of Sibanye-Stillwater or Lonmin prior to, or
of Sibanye-Stillwater after, the Effective Date will be subject to certain US transfer restrictions
relating to the New Sibanye-Stillwater Shares received pursuant to the Scheme. For the purposes
of qualifying for the exemption from the registration requirements of the US Securities Act afforded
by Section 3(a)(10), Lonmin will advise the Court that its sanctioning of the Scheme will be relied
upon by Sibanye-Stillwater as an approval of the Scheme following a hearing on its fairness to
Lonmin Shareholders.
The receipt of New Sibanye-Stillwater Shares pursuant to the Offer by a US Lonmin Shareholder
may be a taxable transaction for US federal income tax purposes and under applicable state and
local, as well as foreign and other, tax laws. Each Lonmin Shareholder is urged to consult his
independent professional adviser immediately regarding the tax consequences of the Offer.
It may be difficult for US Lonmin Shareholders to enforce their rights and claims arising out of the
US federal securities laws, since Sibanye-Stillwater and Lonmin are located in countries other than
36
the United States, and some or all of their officers and directors may be residents of countries
other than the United States. US Lonmin Shareholders may not be able to sue a non-US company
or its officers or directors in a non-US court for violations of the US securities laws. Further, it may
be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s
judgment.
None of the securities referred to in this Announcement have been approved or disapproved by
the SEC, any state securities commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the adequacy or accuracy of the
information contained in this Announcement. Any representation to the contrary is a criminal
offence in the United States
The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the Financial Conduct Authority, the UKLA and the Johannesburg Stock
Exchange.
Forward-looking statements
This Announcement contains forward-looking statements within the meaning of the “safe harbour”
provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-
looking statements, including, among others, those relating to Sibanye-Stillwater’s and Lonmin’s
financial positions, business strategies, plans and objectives of management for future operations,
are necessarily estimates reflecting the best judgement of the senior management and directors of
Sibanye-Stillwater and Lonmin. All statements other than statements of historical facts in this
Announcement may be forward-looking statements. Forward-looking statements also often use
words such as “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning.
By their nature, forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances and should be considered in light of various important factors,
including those set forth in this disclaimer. Readers are cautioned not to place undue reliance on
such statements. The important factors that could cause Sibanye-Stillwater’s and Lonmin’s actual
results, performance or achievements to differ materially from those in the forward-looking
statements include, among others, economic, business, political and social conditions in the
United Kingdom, South Africa, Zimbabwe and elsewhere; changes in assumptions underlying
Sibanye-Stillwater’s and Lonmin’s estimation of their current mineral reserves and resources; the
ability to achieve potential synergies from the Offer; the ability to achieve anticipated efficiencies
and other cost savings in connection with past and future acquisitions, as well as at existing
operations; the success of Sibanye-Stillwater’s and Lonmin’s business strategies, exploration and
development activities; the ability of Sibanye-Stillwater and Lonmin to comply with requirements
that they operate in a sustainable manner; changes in the market price of gold, PGMs and/or
uranium; the occurrence of hazards associated with underground and surface gold, PGMs and
uranium mining; the occurrence of labour disruptions and industrial action; the availability, terms
and deployment of capital or credit; changes in relevant government regulations, particularly
environmental, tax, health and safety regulations and new legislation affecting water, mining,
mineral rights and business ownership, including any interpretations thereof which may be subject
to dispute; the outcome and consequence of any potential or pending litigation or regulatory
proceedings or other environmental, health and safety issues; power disruptions, constraints and
cost increases; supply chain shortages and increases in the price of production inputs; fluctuations
in exchange rates, currency devaluations, inflation and other macro-economic monetary policies;
the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance;
their ability to hire and retain senior management or sufficient technically skilled employees, as
well as their ability to achieve sufficient representation of historically disadvantaged South Africans
in management positions; failure of information technology and communications systems; the
37
adequacy of insurance coverage; any social unrest, sickness or natural or man-made disaster at
informal settlements in the vicinity of some of Sibanye-Stillwater’s operations; and the impact of
HIV, tuberculosis and other contagious diseases. These forward-looking statements speak only as
of the date of this Announcement. Sibanye-Stillwater and Lonmin expressly disclaim any obligation
or undertaking to update or revise any forward-looking statement (except to the extent legally
required).
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate for any period and
no statement in this Announcement should be interpreted to mean that earnings or earnings per
share for Sibanye-Stillwater or Lonmin, as appropriate, for the current or future financial years
would necessarily match or exceed the historical published earnings or earnings per share for
Sibanye-Stillwater or Lonmin, as appropriate.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of
any class of relevant securities of an offeree company or of any securities exchange offeror (being
any offeror other than an offeror in respect of which it has been announced that its offer is, or is
likely to be, solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain details
of the person’s interests and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) of the Takeover Code applies must be made by no
th
later than 3.30 pm (London time) on the 10 business day following the commencement of the
th
offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10 business day
following the announcement in which any securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent.
or more of any class of relevant securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person’s interests and short positions in, and rights to subscribe for,
any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been disclosed under Rule 8 of the Takeover
Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Takeover Code applies must
be made by no later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3
of the Takeover Code.
Opening Position Disclosures must also be made by the offeree company and by any offeror and
Dealing Disclosures must also be made by the offeree company, by any offeror and by any
persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Takeover Code).
38
Details of the offeree and offeror companies in respect of whose relevant securities Opening
Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table
on the Panel’s website at http://www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on
+44 (0) 20 7638 0129.
Electronic communications
Please be aware that addresses, electronic addresses and certain information provided by Lonmin
Shareholders, persons with information rights and other relevant persons for the receipt of
communications from Lonmin may be provided to Sibanye-Stillwater during the Offer Period as
requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the
Takeover Code.
Publication on website and availability of hard copies
A copy of this Announcement will be made available in due course subject to certain restrictions
relating to persons resident in Restricted Jurisdictions on Sibanye-Stillwater’s and Lonmin’s
websites at www.sibanyestillwater.com/investors/transactions/lonmin and
www.lonmin.com/investors/sibanye-stillwater-offer respectively by no later than 12 noon (London
time) on 15 December 2017. For the avoidance of doubt, the contents of these websites are not
incorporated into and do not form part of this Announcement.
You may request a hard copy of this Announcement by: (i) contacting James Wellsted, SVP
Investor Relations of Sibanye-Stillwater, on +27 10 493 6923 or via email at
james.wellsted@sibanyestillwater.com, or Cain Farrel, Company Secretary of Sibanye-Stillwater,
on +27 10 493 6921 or via email at cain.farrel@sibanyestillwater.com, during business hours; or
(ii) contacting St James Corporate Services Limited during business hours on +44 (0) 20 7796
8644 or by submitting a request in writing to St James’s Corporate Services Limited at Suite 31,
Second Floor, 107 Cheapside, London, EC2V 6DN, United Kingdom. You may also request that all
future documents, announcements and information to be sent to you in relation to the Offer should
be in hard copy form.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
that precede them.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Takeover Code, Lonmin confirms that, as at the date of this
Announcement, it has in issue 282,784,288 ordinary shares of US$0.0001 each. No ordinary
shares are held in treasury. The International Securities Identification Number (ISIN) of the
ordinary shares is GB00BYSRJ698. Lonmin has an ADR program for which Bank of New York
Mellon acts as the depositary. Each Lonmin ADS represents one ordinary share of Lonmin. The
Lonmin ADSs trade on the Over-The-Counter market in the United States. The trading symbol for
the ADSs is LNMIY and the ISIN is US54336Q3020.
In accordance with Rule 2.9 of the Takeover Code, Sibanye-Stillwater confirms that, as at the date
of this Announcement, it has in issue 2,168,721,220 ordinary shares of no par value. No ordinary
39
shares are held in treasury. The International Securities Identification Number (ISIN) of the
ordinary shares is ZAE000173951. Sibanye-Stillwater has an ADR program for which Bank of New
York Mellon acts as depositary. Each Sibanye-Stillwater ADS represents four Sibanye-Stillwater
Shares. The Sibanye-Stillwater ADRs trade on the New York Stock Exchange. The trading symbol
for the Sibanye-Stillwater ADSs is SBGL and the ISIN is US8257242060.
40
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
Part A: Conditions of the Scheme and the Offer
1 The Offer is conditional upon the Scheme becoming unconditional and effective, subject to
the Takeover Code, by not later than the Longstop Date or such later date (if any) as
Sibanye-Stillwater and Lonmin may, with the consent of the Panel, agree and, if required,
the Court may allow.
2 The Scheme will be subject to the following conditions:
2.1
(i) its approval at the Court Meeting (or any adjournment thereof) by a majority
in number of the Lonmin Shareholders (or the relevant class or classes
thereof, if applicable) who are on the register of members of Lonmin at the
Scheme Voting Record Time and who are present and vote, whether in
person or by proxy, and who represent not less than 75 per cent. in value of
the Lonmin Shares voted by those Lonmin Shareholders; and
nd
(ii) such Court Meeting being held on or before the 22 day after or the
expected date of the Court Meeting to be set out in the Scheme Document
in due course (or such later date as may be agreed by Sibanye-Stillwater
and Lonmin and, if required, the Court may allow);
2.2
(i) all resolutions in connection with or required to approve and implement the
Scheme being duly passed by Lonmin Shareholders representing the
requisite majority or majorities of votes cast at the Lonmin General Meeting
(or at any adjournment of that meeting); and
nd
(ii) such Lonmin General Meeting being held on or before the 22 day after
the expected date of the Lonmin General Meeting to be set out in the
Scheme Document in due course (or such later date as may be agreed by
Sibanye-Stillwater and Lonmin and, if required, the Court may allow);
2.3
(i) the sanction of the Scheme by the Court (with or without modification but
subject to any modification being on terms acceptable to Lonmin and
Sibanye-Stillwater) and the delivery of a copy of the Court Order to the
Registrar of Companies; and
nd
(ii) the Court hearing to sanction the Scheme being held on or before the 22
day after the expected date of the Court sanction hearing to be set out in
the Scheme Document in due course (or such later date as may be agreed
by Sibanye-Stillwater and Lonmin and, if required, the Court may allow).
3 In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer
will be conditional upon the following Conditions and, accordingly, the necessary actions to
make the Scheme effective (including delivery of the Court Order to the Registrar of
41
Companies) will not be taken unless such Conditions (as amended if appropriate) have
been satisfied or, where relevant, waived in writing:
Approval of Sibanye-Stillwater Shareholders
(a) an ordinary resolution to approve the allotment and issue of the New Sibanye-
Stillwater Shares in connection with the Offer being duly passed by Sibanye-
Stillwater Shareholders representing more than 50 per cent. of the voting rights
exercised on the ordinary resolution at the Sibanye-Stillwater Shareholder Meeting
(or at any adjournment of that meeting);
Approval by the Johannesburg Stock Exchange of the admission of the New
Sibanye-Stillwater Shares to trading
(b) approval or approval in principle from the Johannesburg Stock Exchange in
accordance with the terms of the JSE Listing Requirements in respect of:
(i) the Admission of the New Sibanye-Stillwater Shares to the Main Board of the
Johannesburg Stock Exchange; and
(ii) the Admission of the New Sibanye-Stillwater Shares to trading becoming
effective in accordance with the JSE Listing Requirements;
Competition and Markets Authority clearance
(c) insofar as the Offer creates a relevant merger situation within the meaning of
Section 23 of the Enterprise Act 2002 (as amended), the CMA indicating, on terms
satisfactory to Sibanye-Stillwater (in its sole discretion), that it does not intend to
make a CMA Phase 2 Reference of the Offer or any part thereof or of any matter
arising from or relating to the Offer;
European Commission clearance
(d) in so far as the Offer falls within the scope of Council Regulation (EC) 139/2004 (the
“Regulation”), including (but not limited to) by way of a decision by the European
Commission to examine the Offer pursuant to Article 22(3) of the Regulation, the
European Commission taking a decision, on terms satisfactory to Sibanye-Stillwater
(in its sole discretion), that it shall not initiate proceedings under Article 6(1)(c) of the
Regulation in relation to the Offer or any part thereof or any matter arising from or
relating to the Offer;
South African clearances
(e)
(i) all and any approvals for the Offer that may be required in terms of the South
African Competition Act are granted by the South African Competition
Authorities (being the South African Competition Tribunal or the Competition
Appeal Court, as the case may be) under the South African Competition Act,
89 of 1998 (as amended); and
(ii) the Financial Surveillance Department of the South African Reserve Bank
having accorded exchange control approval for the Offer, in terms of the
Exchange Control Regulations, 1961 (as amended) issued in terms of the
South African Currency and Exchanges Act, 1933,
provided that each such approval shall either be:
(I) unconditional or unqualified; or
42
(II) on such conditions or terms as are satisfactory to Sibanye-Stillwater
(in its sole discretion);
No cancellation of Lonmin Mining Rights
(f) there is no cancellation of any prospecting right or mining right held by a member of
the Wider Lonmin Group pursuant to Section 47 of the MPRDA where such
cancellation is material in the context of the Wider Lonmin Group taken as a whole,
and if such a cancellation has occurred it has not been: (i) withdrawn, lifted or
revoked in writing by the Minister; or (ii) set aside, nullified or otherwise suspended
by the order of a court of competent jurisdiction, within 15 Business Days of such
cancellation (or, if earlier, by the date scheduled for the Court hearing to approve the
Scheme);
Other notifications, waiting periods and Authorisations
(g) other than in relation to the matters referred to in Conditions 3(a) to (f), (and for the
avoidance of doubt, other than in relation to antitrust matters) all material
notifications, filings or applications which are necessary or considered appropriate or
desirable by Sibanye-Stillwater (acting reasonably) having been made in connection
with the Offer and all necessary waiting periods (including any extensions thereof)
under any applicable legislation or regulation of any jurisdiction having expired,
lapsed or been terminated or waived (as appropriate) and all statutory and
regulatory obligations in any jurisdiction having been complied with in each case in
respect of the Offer and all Authorisations which are deemed reasonably necessary
or appropriate by Sibanye-Stillwater in any jurisdiction for or in respect of the Offer
and, except pursuant to Chapter 3 of Part 28 of the UK Companies Act, the
acquisition or the proposed acquisition of any shares or other securities in, or control
or management of, Lonmin or any other member of the Wider Lonmin Group by any
member of the Wider Sibanye-Stillwater Group having been obtained in terms and in
a form reasonably satisfactory to Sibanye-Stillwater, acting reasonably, from all
appropriate Third Parties or (without prejudice to the generality of the foregoing)
from any person or bodies with whom any member of the Wider Lonmin Group or
the Wider Sibanye-Stillwater Group has entered into contractual arrangements and
all such Authorisations reasonably necessary or appropriate to carry on the business
of any member of the Wider Lonmin Group in any jurisdiction having been obtained
and all such Authorisations remaining in full force and effect at the time at which the
Offer becomes otherwise effective and there being no notice or intimation of an
intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
General antitrust and regulatory
(h) other than in relation to the matters referred to in Conditions 3(c) to (e), no antitrust
regulator or Third Party having given notice of a decision to take, institute,
implement or threaten any action, proceeding, suit, investigation, inquiry or
reference (and, in each case, not having withdrawn the same), or having required
any action to be taken or otherwise having done anything, or having enacted, made
or proposed any statute, regulation, decision, order or change to published practice
(and in each case, not having withdrawn the same) and there not continuing to be
outstanding any statute, regulation, decision or order which would or might:
(i) require, prevent or materially delay the divestiture or materially alter the
terms envisaged for such divestiture by any member of the Wider Sibanye-
Stillwater Group or by any member of the Wider Lonmin Group of all or any
43
material part of its businesses, assets or property or impose any limitation
on the ability of all or any of them to conduct their businesses (or any part
thereof) or to own, control or manage any of their assets or properties (or
any part thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the UK Companies Act, require
any member of the Wider Sibanye-Stillwater Group or the Wider Lonmin
Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider Lonmin Group or any
asset owned by any Third Party (other than in the implementation of the
Offer);
(iii) impose any material limitation on, or result in a material delay in, the ability
of any member of the Wider Sibanye-Stillwater Group directly or indirectly
to acquire, hold or to exercise effectively all or any rights of ownership in
respect of shares or other securities in Lonmin or on the ability of any
member of the Wider Lonmin Group or any member of the Wider Sibanye-
Stillwater Group directly or indirectly to hold or exercise effectively all or any
rights of ownership in respect of shares or other securities (or the
equivalent) in, or to exercise voting or management control over, any
member of the Wider Lonmin Group;
(iv) otherwise adversely affect any or all of the business, assets, profits or
prospects of any member of the Wider Lonmin Group or any member of the
Wider Sibanye-Stillwater Group;
(v) result in any member of the Wider Lonmin Group or any member of the
Wider Sibanye-Stillwater Group ceasing to be able to carry on business
under any name under which it presently carries on business;
(vi) make the Offer, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or management
of, Lonmin by any member of the Wider Sibanye-Stillwater Group void,
unenforceable and/or illegal under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly materially prevent or prohibit, restrict,
restrain, or delay or otherwise to a material extent or otherwise materially
interfere with the implementation of, or impose material additional
conditions or obligations with respect to, or otherwise materially challenge,
impede, interfere or require material amendment of the Offer or the
acquisition or proposed acquisition of any shares or other securities in, or
control or management of, Lonmin by any member of the Wider Sibanye-
Stillwater Group;
(vii) require, prevent or materially delay a divestiture by any member of the
Wider Sibanye-Stillwater Group of any shares or other securities (or the
equivalent) in any member of the Wider Lonmin Group or any member of
the Wider Sibanye-Stillwater Group; or
(viii) impose any material limitation on the ability of any member of the Wider
Sibanye-Stillwater Group or any member of the Wider Lonmin Group to
conduct, integrate or co-ordinate all or any part of its business with all or
any part of the business of any other member of the Wider Sibanye-
Stillwater Group and/or the Wider Lonmin Group,
44
and all applicable waiting and other time periods (including any extensions thereof)
during which any such antitrust regulator or Third Party could decide to take,
institute, implement or threaten any such action, proceeding, suit, investigation,
inquiry or reference or take any other step under the laws of any jurisdiction in
respect of the Offer or the acquisition or proposed acquisition of any Lonmin Shares
or otherwise intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
(i) except as Disclosed, there being no provision of any arrangement, agreement,
lease, licence, franchise, permit or other instrument to which any member of the
Wider Lonmin Group is a party or by or to which any such member or any of its
assets is or may be bound, entitled or be subject or any event or circumstance
which, as a consequence of the Offer or the acquisition or the proposed acquisition
by any member of the Wider Sibanye-Stillwater Group of any shares or other
securities (or the equivalent) in Lonmin or because of a change in the control or
management of any member of the Wider Lonmin Group or otherwise, would or
might reasonably be expected to result in (in any case to an extent which is or would
be material in the context of the Wider Lonmin Group taken as a whole):
(i) any monies borrowed by, or any other indebtedness, actual or contingent,
of, or any grant available to, any member of the Wider Lonmin Group being
or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or being capable of becoming or
being withdrawn or inhibited;
(ii) the creation, save in the ordinary and usual course of business, or
enforcement of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any member of the
Wider Lonmin Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen) becoming
enforceable;
(iii) any such arrangement, agreement, lease, licence, franchise, permit or
other instrument being terminated or the rights, liabilities, obligations or
interests of any member of the Wider Lonmin Group being adversely
modified or adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
(iv) any liability of any member of the Wider Lonmin Group to make any
severance, termination, bonus or other payment to any of its directors or
other officers;
(v) the rights, liabilities, obligations, interests or business of any member of the
Wider Lonmin Group or any member of the Wider Sibanye-Stillwater Group
under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider Lonmin
Group or any member of the Wider Sibanye-Stillwater Group in or with any
other person or body or firm or company (or arrangement relating to any
such interests or business) being or becoming capable of being terminated,
45
or adversely modified or affected or any onerous obligation or liability
arising or any adverse action being taken thereunder;
(vi) any member of the Wider Lonmin Group ceasing to be able to carry on
business under any name under which it presently carries on business;
(vii) the value of, or the financial or trading position or prospects of, any
member of the Wider Lonmin Group being prejudiced or adversely affected;
or
(viii) the creation or acceleration of any material liability (actual or contingent) by
any member of the Wider Lonmin Group other than trade creditors or other
liabilities incurred in the ordinary course of business,
and, except as Disclosed, no event having occurred which, under any provision of
any arrangement, agreement, licence, permit, franchise, lease or other instrument to
which any member of the Wider Lonmin Group is a party or by or to which any such
member or any of its assets are bound, entitled or subject, would or might result in
any of the events or circumstances as are referred to in Conditions (i) to (viii) (in
each case to an extent which is material in the context of the Wider Lonmin Group
taken as a whole);
Certain events occurring since 30 September 2016
(j) except as Disclosed, no member of the Wider Lonmin Group having since 30
September 2016:
(i) issued or agreed to issue, or authorised or proposed or announced its
intention to authorise or propose the issue, of additional shares of any
class, or securities or securities convertible into, or exchangeable for, or
rights, warrants or options to subscribe for or acquire, any such shares,
securities or convertible securities or transferred or sold or agreed to
transfer or sell or authorised or proposed the transfer or sale of Lonmin
Shares out of treasury (except, where relevant, as between Lonmin and
wholly-owned subsidiaries of Lonmin or between the wholly-owned
subsidiaries of Lonmin and except for the issue or transfer out of treasury
of Lonmin Shares on the exercise of employee share options or vesting of
employee share awards in the ordinary course under the Lonmin Share
Plans);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or distribution (whether payable
in cash or otherwise) or other return of value other than dividends (or
distributions (whether payable in cash or otherwise) or other return of
value) lawfully paid or made by any wholly-owned subsidiary of Lonmin to
Lonmin or any of its wholly-owned subsidiaries;
(iii) other than pursuant to the Offer (and except for transactions between
Lonmin and its wholly-owned subsidiaries or between the wholly-owned
subsidiaries of Lonmin and transactions in the ordinary course of business)
implemented, effected, authorised or proposed or announced its intention
to implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or
disposal of assets or shares or loan capital (or the equivalent thereof) in
46
any undertaking or undertakings in any such case to an extent which is
material in the context of the Wider Lonmin Group taken as a whole;
(iv) (except for transactions between Lonmin and its wholly-owned subsidiaries
or between the wholly-owned subsidiaries of Lonmin or in respect of
transactions in the ordinary course of business) disposed of, or transferred,
mortgaged or created any security interest over any material asset or any
right, title or interest in any material asset or authorised, proposed or
announced any intention to do so;
(v) (except for transactions between Lonmin and its wholly-owned subsidiaries
or between the wholly-owned subsidiaries of Lonmin or in respect of
transactions in the ordinary course of business) issued, authorised or
proposed or announced an intention to authorise or propose, the issue of or
made any change in or to the terms of any debentures or become subject
to any contingent liability or incurred or increased any indebtedness which
is material in the context of the Wider Lonmin Group taken as a whole;
(vi) except in the ordinary course of business, entered into or materially varied
or authorised, proposed or announced its intention to enter into or
materially vary any material contract, arrangement, agreement, transaction
or commitment (whether in respect of capital expenditure or otherwise)
which is of a long-term, unusual or onerous nature or magnitude or which is
or which involves or could involve an obligation of a nature or magnitude
which is reasonably likely to be materially restrictive on the business of any
member of the Wider Lonmin Group and which, taken together with any
other such transaction, arrangement, agreement, contract or commitment,
is material in the context of the Wider Lonmin Group taken as a whole;
(vii) entered into or varied the terms of, or made any offer (which remains open
for acceptance) to enter into or vary to a material extent the terms of any
contract, service agreement, commitment or arrangement with any director
or senior executive of any member of the Wider Lonmin Group, save as
agreed in writing by Sibanye-Stillwater;
(viii) proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme or other benefit relating to the employment or
termination of employment of any employee of the Wider Lonmin Group
which is material in the context of the Wider Lonmin Group taken as a
whole, save as agreed in writing by Sibanye-Stillwater;
(ix) purchased, redeemed, repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or,
except in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital, save as agreed in
writing by Sibanye-Stillwater;
(x) waived, compromised or settled any claim which is material in the context
of the Wider Lonmin Group taken as a whole;
(xi) had any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider Lonmin
Group being or becoming repayable, or capable of being declared
47
repayable, by any member of the Wider Lonmin Group immediately or prior
to its or their stated maturity date or repayment date, or the ability of any
such member of the Wider Lonmin Group to borrow monies or incur any
indebtedness being withdrawn or inhibited or being capable of becoming or
being withdrawn or inhibited, in each case to an extent which is or would be
material in the context of the Wider Lonmin Group taken as a whole;
(xii) been subject to the enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of
any member of the Wider Lonmin Group or any such mortgage, charge or
other security interest (whenever created, arising or having arisen)
becoming enforceable, in each case to an extent which is or would be
material in the context of the Wider Lonmin Group taken as a whole;
(xiii) terminated or varied the terms of any agreement or arrangement between
any member of the Wider Lonmin Group and any other person in a manner
which would or might reasonably be expected to have a material adverse
effect on the financial position of the Wider Lonmin Group taken as a
whole;
(xiv) made any material alteration to its memorandum or articles of association
or other incorporation documents;
(xv) made or agreed or consented to any change to:
(I) the terms of the trust deeds and rules constituting the pension
scheme(s) established by any member of the Wider Lonmin
Group for its directors, employees or their dependants;
(II) the contributions payable to any such scheme(s) or to the
benefits which accrue, or to the pensions which are payable,
thereunder;
(III) the basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined; or
(IV) the basis upon which the liabilities (including pensions) of such
pension schemes are funded, valued, made, agreed or
consented to,
to an extent which is in any such case material in the context of the Wider
Lonmin Group taken as a whole;
(xvi) been unable, or admitted in writing that it is unable, to pay its debts as and
when they fall due or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business which is material in the
context of the Wider Lonmin Group taken as a whole;
(xvii) (other than in respect of any member of the Wider Lonmin Group that was
dormant and solvent at the relevant time) taken or proposed any steps,
corporate action or had any legal proceedings instituted or threatened
against any member of the Wider Lonmin Group in relation to the
48
suspension of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the appointment
of a receiver, administrator, manager, administrative receiver, trustee,
business rescue practitioner or similar officer of all or any material part of its
assets or revenues or any analogous or equivalent steps or proceedings in
any jurisdiction or appointed any analogous person in any jurisdiction or
had any such person appointed;
(xviii) (except for transactions between Lonmin and its wholly-owned subsidiaries
or between its wholly-owned subsidiaries, or in the ordinary course of
business) made, authorised, proposed or announced an intention to
propose any change in its loan capital;
(xix) entered into, implemented or authorised the entry into, any joint venture,
asset or profit sharing arrangement, partnership or merger of business or
corporate entities; or
(xx) entered into any agreement, arrangement, commitment or contract or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced an intention to, or to propose to,
effect any of the transactions, matters or events referred to in this Condition
3(j);
No adverse change, litigation, regulatory inquiry or similar
(k) except as Disclosed, since 30 September 2016 there having been:
(i) no adverse change and no circumstance having arisen which would or
might be expected to result in any adverse change in, the business, assets,
financial or trading position or profits or prospects or operational
performance of any member of the Wider Lonmin Group which is material
in the context of the Wider Lonmin Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings
having been threatened, announced or instituted by or against or remaining
outstanding against or in respect of, any member of the Wider Lonmin
Group or to which any member of the Wider Lonmin Group is or may
become a party (whether as claimant, defendant or otherwise) having been
threatened, announced, instituted or remaining outstanding by, against or in
respect of, any member of the Wider Lonmin Group, in each case which
might reasonably be expected to have a material adverse effect on the
Wider Lonmin Group taken as a whole;
(iii) no inquiry, review or investigation by, or complaint or reference to, any
Third Party against or in respect of any member of the Wider Lonmin Group
having been threatened, announced or instituted or remaining outstanding
by, against or in respect of any member of the Wider Lonmin Group, in
each case which might reasonably be expected to have a material adverse
effect on the Wider Lonmin Group taken as a whole;
(iv) no contingent or other liability having arisen or become apparent to
Sibanye-Stillwater or increased other than in the ordinary course of
business which is reasonably likely to affect adversely the business, assets,
financial or trading position or profits or prospects of any member of the
49
Wider Lonmin Group to an extent which is material in the context of the
Wider Lonmin Group taken as a whole; or
(v) no steps having been taken and no omissions having been made which are
likely to result in the withdrawal, cancellation, termination or modification of
any licence held by any member of the Wider Lonmin Group which is
necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which might reasonably be
expected to have a material adverse effect on the Wider Lonmin Group
taken as a whole;
No discovery of certain matters regarding information, liabilities and
environmental issues
(l) except as Disclosed, Sibanye-Stillwater not having discovered:
(i) that any financial, business or other information concerning the Wider
Lonmin Group publicly announced prior to this date of the Announcement
or disclosed at any time to any member of the Wider Sibanye-Stillwater
Group by or on behalf of any member of the Wider Lonmin Group prior to
the date of this Announcement is misleading, contains a material
misrepresentation of any fact, or omits to state a fact necessary to make
that information not misleading, in any such case to a material extent in the
context of the Wider Lonmin Group taken as a whole;
(ii) that any member of the Wider Lonmin Group or any partnership, company
or other entity in which any member of the Wider Lonmin Group has a
significant economic interest and which is not a subsidiary undertaking of
Lonmin is subject to any liability, contingent or otherwise and which is
material in the context of the Wider Lonmin Group taken as a whole;
(iii) that any past or present member of the Wider Lonmin Group has not
complied in any material respect with all applicable legislation, regulations
or other requirements of any jurisdiction or any Authorisations relating to
the use, treatment, storage, carriage, disposal, discharge, spillage, release,
leak or emission of any waste or hazardous substance or any substance
likely to impair the environment (including property) or harm human or
animal health or otherwise relating to environmental matters or the health
and safety of humans, which non-compliance would be likely to give rise to
any liability including any penalty for non-compliance (whether actual or
contingent) on the part of any member of the Wider Lonmin Group which is
material in the context of the Wider Lonmin Group taken as a whole;
(iv) that there has been a material disposal, discharge, spillage, accumulation,
release, leak, emission or the migration, production, supply, treatment,
storage, transport or use of any waste or hazardous substance or any
substance likely to impair the environment (including any property) or harm
human or animal health which (whether or not giving rise to non-
compliance with any law or regulation) would be likely to give rise to any
liability (whether actual or contingent) on the part of any member of the
Wider Lonmin Group which is material in the context of the Wider Lonmin
Group taken as a whole;
50
(v) that there is or is reasonably likely to be any material obligation or liability
(whether actual or contingent) or requirement to make good, remediate,
repair, reinstate or clean up any property, asset or any controlled waters
currently or previously owned, occupied, operated or made use of or
controlled by any past or present member of the Wider Lonmin Group (or
on its behalf), or in which any such member may have or previously have
had or be deemed to have had an interest, under any environmental
legislation, common law, regulation, notice, circular, Authorisation or order
of any Third Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto which is
material in the context of the Wider Lonmin Group taken as a whole; or
(vi) that circumstances exist (whether as a result of making the Offer or
otherwise) which would be reasonably likely to lead to any Third Party
instituting (or whereby any member of the Wider Lonmin Group would be
likely to be required to institute), an environmental audit or taking any steps
which would in any such case be reasonably likely to result in any actual or
contingent liability to improve or install new plant or equipment or to make
good, repair, reinstate or clean up any property of any description or any
asset now or previously owned, occupied or made use of by any past or
present member of the Wider Lonmin Group (or on its behalf) or by any
person for which a member of the Wider Lonmin Group is or has been
responsible, or in which any such member may have or previously have
had or be deemed to have had an interest, which is material in the context
of the Wider Lonmin Group taken as a whole;
Anti-corruption and sanctions
(vii) any past or present member, director, officer or employee of the Wider
Lonmin Group or any person that performs or has performed services for or
on behalf of any such company is engaging in or has, at any time during
the course of such person’s employment with, or performance of services
for or on behalf of, any member of the Wider Lonmin Group, engaged in
any activity, practice or conduct (or omitted to take any action) which would
constitute an offence under the UK Bribery Act 2010, the US Foreign
Corrupt Practices Act of 1977, as amended, or any other applicable anti-
corruption legislation; or
(viii) any past or present member, director, officer or employee of the Wider
Lonmin Group or any person that performs or has performed services for or
on behalf of such company is engaging in or has at any time engaged in
any act of bribery or has paid or agreed to pay any bribe including any
“inducement fee” given or agreed to give any similar gift or benefit or paid
or agreed to pay to a concealed bank account or fund to or for the account
of, any customer, supplier, governmental official or employee,
representative of a political party, or other person for the purpose of
obtaining or retaining business or otherwise engaged in any activity, done
such things (or omitted to do such things) in contravention of the UK
Bribery Act 2010, the US Foreign Corrupt Practices Act 1977, as amended,
or any other anti-corruption legislation applicable to the Wider Lonmin
Group, in each case which is material in the context of the Lonmin Group
as a whole; or
51
No criminal property
(ix) any asset of any member of the Wider Lonmin Group constitutes criminal
property as defined by Section 340(3) of the UK Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition).
Part B: Certain further terms of the Offer
1 Subject to the requirements of the Panel, Sibanye-Stillwater reserves the right to waive:
(i) any of the Conditions set out in the above Condition 2 for the timing of the Court
Meeting, the Lonmin General Meeting and the Court hearing to sanction the Scheme
and the effectiveness of the Scheme. If any such deadline is not met, Sibanye-
Stillwater will make an announcement by 8.00 am (London time) on the Business
Day following such deadline confirming whether it has invoked or waived the
relevant Condition or agreed with Lonmin to extend the deadline in relation to the
relevant Condition; and
(ii) in whole or in part, all or any of the above Conditions 3(c) to (l) (inclusive) of Part A
of this Appendix I to this Announcement.
2 If Sibanye-Stillwater is required by the Panel to make an offer for Lonmin Shares under the
provisions of Rule 9 of the Takeover Code, Sibanye-Stillwater may make such alterations to
any of the above Conditions and terms of the Offer as are necessary to comply with the
provisions of that Rule.
3 The Offer will lapse if:
(i) insofar as the Offer or any matter arising from or relating to the Scheme or Offer
constitutes a concentration with a Community dimension within the scope of the
Regulation, or the CMA refers the Offer to the European Commission pursuant to
Article 22(1) of the Regulation and the European Commission decides to examine
the Offer pursuant to Article 22(3) of the Regulation, the European Commission
initiates proceedings under Article 6(1)(c) of the Regulation; or
(ii) insofar as the Offer or any matter arising from the Scheme or Offer does not
constitute a concentration with a Community dimension within the scope of the
Regulation, the Scheme or Offer or any matter arising from or relating to the Offer
becomes subject to a CMA Phase 2 Reference,
in each case, before the date of the Court Meeting.
4 Sibanye-Stillwater will be under no obligation to waive (if capable of waiver), to determine to
be or remain satisfied or to treat as fulfilled any of Conditions 3(c) to (l) (inclusive) of Part A
of this Appendix I to this Announcement by a date earlier than the latest date for the
fulfilment of that Condition notwithstanding that the other Conditions of the Offer may at
such earlier date have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be capable of fulfilment.
5 The Lonmin Shares acquired under the Offer will be acquired fully paid and free from all
liens, equities, charges, encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all rights now or hereafter
attaching or accruing to them, including, without limitation, voting rights and the right to
52
receive and retain in full all dividends and other distributions (if any) declared, made or paid,
or any other return of capital (whether by reduction of share capital or share premium
account or otherwise) made, on or after the date of this Announcement.
6 If, after the date of this Announcement but prior to the Effective Date, any dividend,
distribution or other return of value is proposed, declared, paid or made or becomes payable
by Lonmin and with a record date on or before the Effective Date, Sibanye-Stillwater
reserves the right (without prejudice to any right Sibanye-Stillwater may have, with the
consent of the Panel, to invoke Condition 3(j)(ii) of Part A of this Appendix I to this
Announcement) to adjust the Exchange Ratio downwards to reflect the aggregate amount of
such dividend, distribution or other return of value.
If any such dividend, distribution or other return of value is paid or made before the Effective
Date and Sibanye-Stillwater exercises its rights under this paragraph to adjust the Exchange
Ratio, any reference in this Announcement to the Exchange Ratio will be deemed to be a
reference to the Exchange Ratio as so adjusted.
To the extent that such a dividend, distribution or other return of value has been declared or
announced but not paid or made or is not payable by reference to a record date prior to the
Effective Date or will be: (i) transferred pursuant to the Offer on a basis which entitles
Sibanye-Stillwater to receive the dividend or distribution and to retain it; or (ii) cancelled, the
Exchange Ratio will not be subject to any adjustment in accordance with this paragraph 6.
Sibanye-Stillwater also reserves the right to adjust the Exchange Ratio in such
circumstances as are, and by such amount as is, permitted by the Panel.
Any exercise by Sibanye-Stillwater of its rights referred to in this paragraph will be the
subject of an announcement and, for the avoidance of doubt, will not be regarded as
constituting any revision or variation of the Offer.
7 If, after the date of this Announcement, Sibanye-Stillwater issues new Sibanye-Stillwater
Shares on a pre-emptive basis at a discount greater than ten per cent. to the closing price of
a Sibanye-Stillwater Share on the day immediately preceding the announcement, unless
Sibanye-Stillwater and Lonmin otherwise agree, the Exchange Ratio shall be adjusted to
ensure that Lonmin Shareholders are not disadvantaged by the dilution arising from such
pre-emptive issue. This adjustment shall be calculated by reference to the bonus factor as
reflected in the calculation of the TERP.
8 Sibanye-Stillwater reserves the right to elect (subject to the consent of the Panel) to
implement the acquisition of the Lonmin Shares by way of a takeover offer as an alternative
to the Scheme. In such event, the acquisition will be implemented on substantially the same
terms as those which would apply to the Scheme (subject to appropriate amendments,
including an acceptance condition set at 90 per cent. of the shares to which such offer
relates or such lesser percentage, being more than 50 per cent., as Sibanye-Stillwater may
decide or the Panel may require).
9 The availability of the Offer to persons not resident in the United Kingdom may be affected
by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements. The New
Sibanye-Stillwater Shares to be issued pursuant to the Offer have not been, and will not be,
registered under the US Securities Act nor under any of the relevant securities laws of any
53
Restricted Jurisdiction. Accordingly, the New Sibanye-Stillwater Shares may not be offered,
sold or delivered, directly or indirectly, in the United States or any Restricted Jurisdiction
except pursuant to exemptions from applicable requirements of any such jurisdiction.
10 The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of,
or by any means or instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of, any jurisdiction where to do so
would violate the laws of that jurisdiction.
11 The Offer is governed by the laws of England and Wales and is subject to the jurisdiction of
the English Courts and to the Conditions and further terms set out in this Appendix I to this
Announcement and to be set out in the Scheme Document. The Offer will be subject to the
applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority, the UKLA and the Johannesburg Stock Exchange. The New
Sibanye-Stillwater Shares will be issued credited as fully paid and will rank pari passu in all
respects with the Sibanye-Stillwater Shares.
12 Each of the Conditions will be regarded as a separate Condition and will not be limited by
reference to any other Condition.
54
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
(i) The value placed by the Offer and attributed to the entire share capital of Lonmin is
calculated:
(a) by reference to the price of R18.67 per Sibanye-Stillwater Share, being the 30
trading day volume weighted average price of a Sibanye-Stillwater Share on the
Johannesburg Stock Exchange for the period ended 13 December 2017 (being the
last Business Day prior to this Announcement); and
(b) on the basis of the fully diluted number of Lonmin Shares in issue referred to in
paragraph (iv) below.
(ii) The percentage of the share capital of the Enlarged Sibanye-Stillwater Group that will be
owned by Lonmin Shareholders (being 11.3 per cent.) is calculated by dividing the number
of New Sibanye-Stillwater Shares to be issued pursuant to the terms of the Acquisition
referred to in paragraph (vi)(b) below by the issued share capital of the Enlarged Sibanye-
Stillwater Group (as set out in paragraph (vi) below) and multiplying the resulting sum by
100 to produce a percentage.
(iii) As at close of business on 13 December 2017 (being the last Business Day prior to this
Announcement), Lonmin had in issue 282,784,288 Lonmin Shares and Sibanye-Stillwater
had in issue 2,168,721,220 Sibanye-Stillwater Shares.
(iv) The fully diluted share capital of Lonmin (being 284,938,946 Lonmin Shares) is calculated
as the sum of:
(a) the number of Lonmin Shares referred to in paragraph (iii) above; and
(b) any further Lonmin Shares which may be issued on or after the date of this
Announcement on the exercise of options or vesting of awards under the Lonmin
Share Plans granted on or before this Announcement, amounting in aggregate to
2,203,859 Lonmin Shares, less any Lonmin Shares held in the Lonmin Employee
Benefit Trust (being 49,201 Lonmin Shares).
(v) On the date of this Announcement, neither Lonmin nor Sibanye-Stillwater hold any shares in
treasury.
(vi) The share capital of the Enlarged Sibanye-Stillwater Group (being 2,444,257,181) has been
calculated as the sum of:
(a) 2,168,721,220 Sibanye-Stillwater Shares, being the number of Sibanye-Stillwater
Shares in issue as at close of business on 13 December 2017 (being the last
Business Day prior to this Announcement); and
(b) 275,535,961 New Sibanye-Stillwater Shares which would be issued pursuant to the
terms of the Acquisition (being 0.967 New Sibanye-Stillwater Shares to be issued
per Lonmin Share multiplied by the fully diluted share capital of Lonmin as set out
in paragraph (iv) above).
(vii) The premium calculations to the price per Lonmin Share have been calculated by reference
to:
55
(a) the closing price of R16.11 per Sibanye-Stillwater Share and of 63.8 pence per
Lonmin Share on 13 December 2017 (being the last Business Day prior to this
Announcement); and
(b) the prior 30 trading day volume weighted average price of a Sibanye-Stillwater
Share of R18.67 and of a Lonmin Share of 71.1 pence (since 2 November 2017 to
13 December 2017).
(viii) Unless otherwise stated, all prices and closing prices for Lonmin Shares are closing middle
market quotations derived from the Official List of the London Stock Exchange.
(ix) Unless otherwise stated, all prices and closing prices for Sibanye-Stillwater Shares are
closing middle market quotations derived from Bloomberg.
(x) The volume weighted average prices of a Lonmin Share and a Sibanye-Stillwater Share are
derived from Bloomberg.
(xi) Unless otherwise stated, the financial information relating to Lonmin has been extracted or
derived (without material adjustment) from the audited consolidated financial statements of
Lonmin for the financial year ended 30 September 2016 and Lonmin’s unaudited interim
results for the six months ended 31 March 2017, each prepared in accordance with IFRS.
(xii) Unless otherwise stated, the financial information relating to Sibanye-Stillwater has been
extracted or derived (without material adjustment) from the audited consolidated financial
statements of Sibanye-Stillwater for the financial year ended 31 December 2016 and
Sibanye-Stillwater’s unaudited interim results for the six months ended 30 June 2017, each
prepared in accordance with IFRS.
(xiii) Where amounts are shown in both South African Rand and Sterling, US Dollar and Sterling,
South African Rand and US Dollar or converted between the aforementioned currencies, in
this document, exchange rates of £1.00/R18.056, £1.00/US$1.3367 and US$1/R13.5081
respectively, have been used, which have been derived from data quoted by Bloomberg as
at 4.30 pm (London time) on 13 December 2017 (being the last Business Day prior to the
date of this Announcement).
(xiv) Earnings per share figures are stated exclusive of exceptional and extraordinary items
where these have been disclosed.
(xv) The timing expectations set out in this Announcement assume that the Acquisition would
become effective in the second half of 2018.
(xvi) Certain figures included in this Announcement have been subject to rounding adjustments.
56
APPENDIX III
IRREVOCABLE UNDERTAKINGS
Lonmin Directors’ Irrevocable Undertakings
Number of Lonmin Shares in
Percentage of Lonmin
Name of Lonmin Director respect of which
issued share capital
undertaking is given
Brian Beamish 14,100 0.004986%
Ben Magara 30,836 0.010904%
Varda Shine 17,037 0.006025%
Dr Len Konar 6,674 0.002360%
Jonathan Leslie 6,851 0.002423%
Barrie van der Merwe, Gillian Fairfield and Kennedy Bungane do not hold any ordinary shares in
Lonmin and therefore have not entered into irrevocable undertakings to vote in favour of the
Scheme at the Court Meeting and the resolutions to be proposed at the Lonmin General Meeting
which is to be convened to approve the Offer.
These irrevocable undertakings will only cease to be binding if:
- this Announcement is not released by 8.00 am (London time) on 14 December 2017 or such
later date as Sibanye-Stillwater and Lonmin may agree;
- Sibanye-Stillwater announces, with the consent of the Panel and before the Scheme
Document is published, that it does not intend to proceed with the Offer and no new, revised
or replacement scheme of arrangement (or Takeover Offer) is announced by Sibanye-
Stillwater in accordance with Rule 2.7 of the Takeover Code; or
- the Scheme (or Takeover Offer, as applicable) lapses or is withdrawn prior to the Longstop
Date in accordance with its terms, excluding where:
- the Scheme lapses or is withdrawn as a result of Sibanye-Stillwater exercising its
right to implement the Acquisition by way of a Takeover Offer rather than a scheme of
arrangement; or
- the lapse or withdrawal either is not confirmed by Sibanye-Stillwater or is followed
within five Business Days by an announcement under Rule 2.7 of the Takeover Code
by Sibanye-Stillwater (or a person acting in concert with it) to implement the
Acquisition either by a new, revised or replacement scheme of arrangement or a
Takeover Offer.
57
APPENDIX IV
STATEMENT ON QUANTIFIED FINANCIAL BENEFITS
PART A
Sibanye-Stillwater has made the following quantified financial benefits statement in paragraph 3 of
the Announcement (the “Quantified Financial Benefits Statement”):
“The Board of Sibanye-Stillwater believes that, as a direct result of the Acquisition, there are
a number of areas where the Enlarged Sibanye-Stillwater Group could benefit from
attractive synergies, creating additional value for Sibanye-Stillwater Shareholders. Sibanye-
Stillwater has demonstrated its ability to extract synergies from the recently acquired
Aquarius Platinum and Rustenburg Operations. Sibanye-Stillwater has already realised
R550 million per annum in annualised operational synergies as at 30 June 2017 from the
Aquarius Platinum and Rustenburg Operations acquisitions and is expected to realise
approximately R1,000 million of annualised synergies by 2018.
Sibanye-Stillwater has identified expected total pre-tax run-rate synergies of approximately
R1,500 million by 2021, averaging approximately R1,280 million per annum for the period
2021 to 2032, as a result of the Acquisition, including:
- in relation to overhead services, a total of approximately R730 million per annum by
2021, with respect to:
- shared services between members of the Enlarged Sibanye-Stillwater
Group;
- overhead costs in respect of management and marketing;
- shared mining services; and
- shared corporate and regulatory costs;
- in relation to processing synergies, a total of approximately R780 million per annum
by 2021, averaging approximately R550 million per annum for the period 2021 to
2032, primarily by utilising spare capacity within Lonmin’s smelting and refining
infrastructure to process concentrate produced by the Rustenburg Operations.
These savings from overhead synergies and reduced processing costs are separate from
those matters contained in Lonmin’s Operational Review (as described in paragraph 4 of
this Announcement) and those matters addressed in Lonmin’s evolving business plan (as
described in paragraph 8 of this Announcement).
Sibanye-Stillwater estimates that the implementation of the overhead synergies would give
rise to expected one-off costs of approximately R80 million and a headcount reduction of
approximately 700. In addition, implementation of the processing synergies would give rise
to expected one-off costs of approximately R1,000 million, such one-off costs to be incurred
primarily in relation to the construction of an additional smelting furnace and Sibanye-
Stillwater will continue to explore other ways to mitigate such one-off costs.
Aside from such one-off costs referred to above, Sibanye-Stillwater does not expect any
material dis-synergies to arise in connection with the Acquisition.”
Reports
58
The Sibanye-Stillwater Board believes that the Enlarged Sibanye-Stillwater Group should be able
to achieve the synergies set out in the Quantified Financial Benefits Statement.
As required by Rule 28.1(a) of the Takeover Code, BDO, as reporting accountants to Sibanye-
Stillwater, have provided a report stating that, in their opinion, the Quantified Financial Benefits
Statement has been properly compiled on the basis stated.
In addition, UBS and HSBC, as financial advisers to Sibanye-Stillwater, have provided a report
stating that, in their view, the Quantified Financial Benefits Statement has been prepared with due
care and consideration.
Copies of these reports are included in Part B and Part C of this Appendix IV to this
Announcement.
Each of BDO, UBS and HSBC has given and not withdrawn its consent to the publication of its
report in this Announcement in the form and context in which it is included.
Bases of calculation of the quantified financial benefits statement
In preparing the Quantified Financial Benefits Statement, Lonmin has provided Sibanye-Stillwater
with certain operating and financial information to facilitate a detailed analysis in support of
evaluating the potential synergies available from the Acquisition.
Baseline cost numbers were agreed based on the underlying business plans of both Sibanye-
Stillwater and Lonmin for their budgeted 2018 financial years with reference to the available
financials for their 2017 financial years and, for the synergies arising from the combination of
group functions, organisation information was reviewed.
The assessment and quantification of the potential synergies have in turn been informed by
Sibanye-Stillwater management’s industry experience as well as their experience of executing and
integrating past acquisitions and discussions with Lonmin management who have undertaken a
number of cost reduction exercises.
Cost saving assumptions were based on a detailed, bottom-up evaluation of the benefits available
from elimination of duplicate activities, the leverage of combined scale economics and operational
efficiencies arising from consolidation of activities within operational facilities. In determining the
estimate of costs savings achievable through the combination of Sibanye-Stillwater and Lonmin,
no savings relating to operations have been included where no overlap exists.
In general, the synergy assumptions have in turn been risk adjusted, exercising a degree of
prudence in the calculation of the estimated synergy benefit set out above.
The Sibanye-Stillwater Board has, in addition, made the following assumptions, all of which are
outside the influence of Sibanye-Stillwater:
- there will be no material impact on the underlying operations of either company or their
ability to continue to conduct their businesses;
- there will be no material change to macroeconomic, political, regulatory or legal conditions
in the markets or regions in which Sibanye-Stillwater and Lonmin operate that materially
impact on the Sibanye-Stillwater and Lonmin business plans and the implementation or
costs to achieve the proposed cost savings;
- there will be no material change in current foreign exchange rates and the spot rates for
commodity prices contained in Sibanye-Stillwater’s business plans;
59
- there will be no change in tax legislation or tax rates or other legislation or regulation in the
countries in which Sibanye-Stillwater and Lonmin operate that could materially impact the
ability to achieve any benefits; and
- there will be no material regulatory impediment to the realisation of the synergies.
This analysis assumes no business disposals pursuant to the Acquisition.
Where appropriate, assumptions were used to estimate the costs of implementing the new
structures, systems and processes required to realise the synergies, including retrenchment costs
to achieve overhead synergies and capital outlays to achieve processing synergies.
Important notes
1. The statements of estimated cost savings and synergies relate to future actions and circumstances
which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings
and synergies referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those estimated. No statement
in the Quantified Financial Benefits Statement, or this Announcement generally, should be
construed as a profit forecast or interpreted to mean that Sibanye-Stillwater’s earnings in the
first full year following the Offer, or in any subsequent period, would necessarily match or be
greater than or be less than those of Sibanye-Stillwater and/or Lonmin for the relevant
preceding financial period or any other period.
2. Due to the scale of the Enlarged Sibanye-Stillwater Group, there may be additional changes
to the Enlarged Sibanye-Stillwater Group’s operations. As a result, and given the fact that the
changes relate to the future, the resulting cost savings may be materially greater or less than
those estimated.
3. In arriving at the estimate of synergies set out in this Announcement, the Sibanye-Stillwater
Board has assumed that there will be no significant impact on the business of the Enlarged
Sibanye-Stillwater Group.
60
PART B
REPORT FROM BDO
BDO LLP
55 Baker Street
London
W1U 7EU
The Directors 14 December 2017
Sibanye Gold Limited
Constantia Office Park
Bridgeview House
Building 11
Ground Floor
th
Corner 14 Avenue and Hendrik Potgieter Street
Gauteng
1709
South Africa
UBS Limited
5 Broadgate
London
EC2M 2QS
HSBC Bank plc
8 Canada Square
London
E14 5HQ
Dear Sirs
Sibanye Gold Limited (trading as Sibanye-Stillwater) (the “Company”)
Proposed acquisition of Lonmin Plc (the “Target”) by the Company
We report on the statement made by the directors of the Company (the “Directors”) regarding
estimated quantified financial benefits made by the Company and set out in Part A of Appendix IV
of the announcement prepared and issued by the Company in connection with Rule 2.7 of the City
Code on Takeovers and Mergers (the “City Code”) (the “Statement” and the “Announcement”,
respectively) and the basis of preparation of the Statement and notes to the Statement set out in
Appendix IV to the Announcement. This report is required by Rule 28.1(a)(i) of the City Code and
is given for the purpose of complying with that rule and for no other purpose.
Responsibility
It is the responsibility of the directors of the Company to prepare the Statement, the basis of
preparation of the Statement and notes to the Statement, in accordance with the requirements of
Rule 28 of the City Code.
It is our responsibility to form an opinion, as required by Rule 28.1(a)(i) of the City Code, as to
whether the Statement has been properly compiled on the basis stated and to report that opinion
to you.
61
Save for any responsibility which we may have to those persons to whom this report is expressly
addressed and for any responsibility arising under Rule 28.1(a)(i) of the City Code to any person
as and to the extent there provided (including to the shareholders of the Company), to the fullest
extent permitted by the law we do not assume any other responsibility and will not accept any
liability to any other person for any loss suffered by any such other person as a result of, arising
out of, or in connection with this report or our statement, required by and given solely for the
purposes of complying with Rule 23.2 of the City Code, consenting to its inclusion in the
Announcement.
Basis of preparation
The Statement has been prepared on the basis stated in Appendix IV to the Announcement.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the
Auditing Practices Board in the United Kingdom.
The work that we performed for the purpose of making this report, which involved no independent
examination of any of the underlying financial information, consisted primarily of considering
whether the Statement has been accurately computed based upon bases of belief (including the
principal assumptions and sources of information summarised in the notes to the Statement).
Whilst the bases of belief (and the principal assumptions and sources of information summarised
in the notes to the Statement) are the responsibility of the Directors, we considered whether there
was anything to indicate whether the bases of belief (or principal assumptions or sources of
information summarised in the notes to the Statement) adopted by the Directors which, in our
opinion, are necessary for a proper understanding of the Statement, have not been disclosed or if
any of the bases of belief (or principal assumptions or sources of information summarised in the
notes to the Statement) made by the Directors appears to us to be unrealistic. This involved
discussing the Statement together with the bases of belief supporting the Statement (including the
principal assumptions and sources of information summarised in the notes to the Statement) with
the Directors and those officers and employees of the Company who developed the underlying
plans and with UBS Limited and HSBC Bank plc. The Statement is subject to uncertainty as
described in the important notes to the Statement.
We planned and performed our work so as to obtain the information and explanations which we
considered necessary in order to provide us with reasonable assurance that the Statement has
been properly compiled on the basis stated.
We do not express any opinion as to the achievability of the synergy benefits estimated by
Directors of the Company in the Statement.
Our work has not been carried out in accordance with auditing or other standards and practices
generally accepted in the United States of America or other jurisdictions outside the United
Kingdom and accordingly should not be relied upon as if it had been carried out in accordance with
those standards and practices.
Opinion
In our opinion the Statement by the Company has been properly compiled on the basis stated.
Yours faithfully
BDO LLP
BDO LLP is a limited liability partnership registered in England and Wales (with registered number
OC305127)
62
PART C
REPORT FROM UBS AND HSBC
The Directors
Sibanye Gold Limited
Constantia Office Park
Bridgeview House
Building 11, Ground Floor
th
Corner 14 Avenue and Hendrik Potgieter Street
Gauteng
1709
South Africa
14 December 2017
Dear Sirs
Recommended all-share offer by Sibanye Gold Limited (trading as Sibanye-Stillwater)
(“Sibanye-Stillwater”) to acquire the entire issued and to be issued ordinary share capital of
Lonmin Plc (“Lonmin” and the “Offer”, respectively)
We refer to the quantified financial benefits statement, the bases of belief thereof and the notes
thereto (together, the “Statement”) made by Sibanye-Stillwater and set out in Part A of Appendix
IV of the Rule 2.7 announcement dated 14 December 2017 (the “Announcement”), for which the
board of directors of Sibanye-Stillwater (the “Directors”) are solely responsible under Rule
28.1(a)(i) of the City Code on Takeovers and Mergers (the “Code”).
We have discussed the Statement (including the assumptions, accounting policies, bases of
calculation and sources of information referred to therein), with the Directors and those officers
and employees of the Sibanye-Stillwater Group who have developed the underlying plans as well
as with BDO LLP (“BDO”). The Statement is subject to uncertainty as described in the
Announcement and our work did not involve an independent examination of any of the financial or
other information underlying the Statement.
We have relied upon the accuracy and completeness of all the financial and other information
provided to us by or on behalf of the Sibanye-Stillwater Group and/or the Lonmin Group, or
otherwise discussed with or reviewed by us, and we have assumed such accuracy and
completeness for the purposes of providing this letter.
We do not express any view as to the achievability of the quantified financial benefits identified by
the Directors.
We have also reviewed the work carried out by BDO and have discussed with them the opinion
addressed to you and us on this matter and which is set out in the Announcement, and the
accounting policies and bases of calculation for the Statement.
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other
purpose. We accept no responsibility to the Sibanye-Stillwater Group, Lonmin or their
shareholders or any person other than the Directors of the Sibanye-Stillwater Group in respect of
the contents of this letter. We are acting exclusively as financial advisers to Sibanye-Stillwater and
63
no one else in connection with the Offer and it was for the purpose of complying with Rule
28.1(a)(ii) of the Code that the Sibanye-Stillwater Group requested UBS Limited and HSBC Bank
plc to prepare this report on the Statement. No person other than the Directors of the Sibanye-
Stillwater Group can rely on the contents of, or the work undertaken in connection with, this letter,
and to the fullest extent permitted by law, we expressly exclude and disclaim all liability (whether in
contract, tort or otherwise) to any other person, in respect of this letter, its contents or the work
undertaken in connection with this letter or any of the results that can be derived from this letter or
any written or oral information provided in connection with this letter.
On the basis of the foregoing, we consider that the Statement, for which the Directors are solely
responsible, for the purposes of the Code, has been prepared with due care and consideration.
Yours faithfully, Yours faithfully,
UBS Limited HSBC Bank plc
64
APPENDIX V
DEFINITIONS
The following definitions apply throughout this Announcement unless the context requires
otherwise:
“3PGE + Au” also known as 4E, comprises three platinum group
elements plus gold and is a summation of Pt, Pd, Rh and
Au;
“6E” also known as 5PGE + Au, comprises five platinum group
elements plus gold and is a summation of Pt, Pd, Rh, Ru,
Ir and Au;
“Acquisition” the acquisition of Lonmin by Sibanye-Stillwater pursuant to
the Offer;
“Admission” admission of the New Sibanye-Stillwater Shares to listing
and trading on the Main Board of the Johannesburg Stock
Exchange;
“Admission Date” the date of Admission;
“ADR” American depositary receipt, being a certificate evidencing
a specific number of Lonmin ADSs or Sibanye-Stillwater
ADSs (as applicable);
“ADS” American depositary share, representing a specific
number of Lonmin Shares or Sibanye-Stillwater Shares (as
applicable);
“Akanani” Akanani Mining (Proprietary) Limited (registered number
1999/009073/07), an exploration and evaluation asset
located on the Northern Limb of the Bushveld Igneous
Complex, in which Lonmin holds a 74 per cent. equity
interest;
“Anglo American Platinum” Anglo American Platinum Limited (Registration number
1946/022452/06), a public company duly incorporated and
registered under the laws of South Africa;
“Announcement” this announcement;
“Aquarius Platinum” Aquarius Platinum Limited (registration number 26290), an
exempted company duly incorporated and registered
under the laws of Bermuda;
“Authorisations” regulatory authorisations, orders, recognitions, grants,
consents, clearances, confirmations, certificates, licences,
permissions or approvals;
“BBBEE” the broad-based black economic empowerment policy of
the government of South Africa, as articulated in the BEE
Legislation;
65
“BBBEE Act” the South African Broad-Based Black Economic
Empowerment Act, 2003;
“BDO” BDO LLP, Sibanye-Stillwater’s reporting accountant;
“BEE” broad-based black economic empowerment, or black
economic empowerment, which arises as a result of the
BEE Legislation;
“BEE Legislation” the following South African legislation: the Employment
Equity Act, 1998; the Skills Development Act, 1998; the
Preferential Procurement Policy Framework Act, 2000; the
BBBEE Act; the Broad-Based Black Economic
Empowerment Amendment Act, 2013; the MPRDA and the
Mining Charter as in force from time to time;
“Blitz Project” Sibanye-Stillwater’s underground Blitz PGM project
adjacent and to the east of the existing Stillwater Mine
designed to explore, define and extract PGM resources
along the far eastern extent of the J-M Reef;
“Board” board of directors;
“Business Day” a day (other than Saturdays, Sundays and public holidays)
on which banks are open for business in the City of
London and South Africa;
“CMA” or “Competition and the UK Competition and Markets Authority;
Markets Authority”
“CMA Phase 2 Reference” a reference of the Offer to the chair of the CMA for the
constitution of a group under Schedule 4 to the Enterprise
and Regulatory Reform Act 2013 (including as a result of
the acceptance or rejection of undertakings in lieu of a
reference);
“Conditions” the conditions to the implementation of the Offer, as set
out in Appendix I to this Announcement and to be set out in
the Scheme Document;
“Co-operation Agreement” the agreement dated 14 December 2017 between
Sibanye-Stillwater and Lonmin relating to, among other
things, the implementation of the Acquisition;
“Court” the High Court of Justice in England and Wales;
“Court Meeting” the meeting of Lonmin Shareholders to be convened
pursuant to an order of the Court under the UK Companies
Act for the purpose of considering and, if thought fit,
approving the Scheme (with or without modification),
including any adjournment, postponement or reconvention
thereof;
“Court Order” the order of the Court sanctioning the Scheme;
“CREST” the relevant system for the paperless settlement of trades
in securities and the holding of uncertificated securities
66
operated by Euroclear;
“Dealing Disclosure” has the same meaning as in Rule 8 of the Takeover Code;
“Deposit Agreement” the deposit agreement governing the Lonmin ADSs;
“Disclosed” the information fairly disclosed by, or on behalf of, Lonmin
(i) in the annual report and accounts of the Lonmin Group
for the financial year ended 30 September 2016; (ii) in this
Announcement; (iii) in any other announcement to a
Regulatory Information Service by, or on behalf of, Lonmin
prior to the publication of this Announcement; or (iv) as
otherwise fairly disclosed in writing to Sibanye-Stillwater
(or its respective officers, employees, agents or advisers in
their capacity as such) prior to the date of this
Announcement;
“DMR” the South African Department of Mineral Resources;
“Due Diligence Clean Team the due diligence clean team protocol put in place by
Protocol” Sibanye-Stillwater and Lonmin in relation to the disclosure
of competitively sensitive confidential information between
Sibanye-Stillwater and Lonmin and their professional
advisers in connection with the Offer;
“Effective Date” the date on which either: (i) the Scheme becomes effective
in accordance with its terms; or (ii) if Sibanye-Stillwater
elects to implement the Acquisition by way of a takeover
offer (as defined in Chapter 3 of Part 28 of the UK
Companies Act), the date on which such takeover offer
becomes or is declared unconditional in all respects;
“Enlarged Sibanye-Stillwater the Sibanye-Stillwater Group as enlarged by the Lonmin
Group” Group following completion of the Acquisition;
“Euroclear” Euroclear UK and Ireland Limited;
“Exchange Ratio” 0.967 New Sibanye-Stillwater Shares for each Lonmin
Share;
“Financial Conduct Authority” the Financial Conduct Authority;
“Forms of Proxy” the forms of proxy in connection with each of the Court
Meeting and the Lonmin General Meeting, which will
accompany the Scheme Document and/or the forms of
proxy in connection with the Sibanye-Stillwater
Shareholder Meeting, which will accompany the Sibanye-
Stillwater Circular (as applicable);
“Gleacher Shacklock” Gleacher Shacklock LLP, Lonmin’s Rule 3 adviser;
“Greenhill” Greenhill & Co. International LLP;
“HSBC” HSBC Bank plc, Sibanye-Stillwater’s Financial Adviser;
“IFRS” International Financial Reporting Standards;
“Johannesburg Stock Exchange” the securities exchange operated by JSE Limited
67
(Registration No. 2005/022939/06), a public company
trading as the “Johannesburg Stock Exchange”, duly
registered and incorporated under the laws of South Africa
and licensed as a securities exchange under the South
African Financial Markets Act, 2012;
“J.P. Morgan Cazenove” J.P. Morgan Securities plc, which conducts its UK
investment banking business as J.P. Morgan Cazenove;
“JSE Listing Requirements” the listings requirements of the Johannesburg Stock
Exchange published under the South African Financial
Markets Act, as amended from time to time;
“Kroondal Operations” the underground and surface operations at Kroondal near
Rustenburg in South Africa, managed through a 50:50 joint
venture with Anglo American Platinum in terms of the
Kroondal PSA;
“Kroondal PSA” the pooling and sharing agreement concluded between
Aquarius Platinum (South Africa) Proprietary Limited
(registration number 2000/000341/07) and RPM on or
around 15 December 2005, as amended by various
addenda thereto;
“Licences Condition” the Condition set out in paragraph 3(f) of Part A of
Appendix I to this Announcement;
“Listing Rules” the listing rules and regulations made by the Financial
Conduct Authority in its capacity as the UKLA under the
Financial Services and Markets Act 2000, and contained in
the UKLA’s publication of the same name, as amended
from time to time;
“London Stock Exchange” the London Stock Exchange plc;
“Longstop Date” 28 February 2019 or such later date as may be agreed in
writing by Sibanye-Stillwater and Lonmin (with the Panel’s
consent and as the Court may approve (if such approval(s)
are required));
“Lonmin” Lonmin Plc;
“Lonmin ADSs” American depositary shares, each of which represents one
Lonmin Share;
“Lonmin Depositary” Bank of New York Mellon, as depositary for the Lonmin
ADR program;
“Lonmin Directors” the directors of Lonmin;
“Lonmin Employee Benefit Trust” means the employee benefit trust established by Lonmin;
“Lonmin General Meeting” the general meeting of Lonmin Shareholders (including
any adjournment thereof) to be convened in connection
with the Scheme and the Acquisition;
“Lonmin Group” Lonmin and its subsidiary undertakings and, where the
context permits, each of them;
68
“Lonmin Shareholders” the holders of Lonmin Shares;
“Lonmin Share Plans” the Lonmin 2015 Long Term Incentive Plan and the
Lonmin Annual Share Award Plan;
“Lonmin Shares” the existing unconditionally allotted or issued and fully paid
ordinary shares of US$0.0001 each in the capital of
Lonmin and any further such ordinary shares which are
unconditionally allotted or issued before the Scheme
becomes effective;
“LTM” the last twelve months;
“Main Market” the main market of the London Stock Exchange;
“Marikana” Marikana platinum mine;
“Market Abuse Regulation” Regulation (EU) No. 596/2014 of the European Parliament
and the Council of 16 April 2015 on market abuse;
“Mimosa Operations” the underground and surface operations located on the
Wedza sub-chamber of the southern portion of the Great
Dyke in Zimbabwe, held in a 50:50 joint venture with
Sibanye-Stillwater (indirectly) and Impala Platinum
Holdings Limited (registration number 1957/001979/06);
“Mining Charter” the broad-based socio-economic empowerment charter for
the South Africa mining and minerals industry published by
the DMR and which became effective on 1 May 2004 (as
amended in September 2010);
“Minister” the Minister of Mineral Resources in South Africa;
“Moshe Capital” Moshe Capital (Pty) Ltd;
“Moz” millions of ounces;
“MPRDA” the South African Mineral and Petroleum Resources
Development Act, 2002;
“New Sibanye-Stillwater Shares” the new Sibanye-Stillwater Shares proposed to be issued
to Lonmin Shareholders in connection with the Offer;
“New York Stock Exchange” the New York Stock Exchange, Inc;
“Offer” the recommended all-share offer being made by Sibanye-
Stillwater to acquire the entire issued and to be issued
ordinary share capital of Lonmin, to be effected by means
of the Scheme (or by way of the takeover offer under
certain circumstances described in this Announcement)
and, where the context admits, any subsequent revision,
variation, extension or renewal thereof;
“Offer Period” the offer period (as defined by the Takeover Code) relating
to Lonmin, which commenced on the date of this
Announcement;
“Official List” the Official List maintained by the UKLA;
69
“Opening Position Disclosure” has the same meaning as in Rule 8 of the Takeover Code;
“Operational Review” has the meaning given in paragraph 4 to this
Announcement;
“Pandora” Pandora platinum mine;
“Panel” the UK Panel on Takeovers and Mergers;
“PGM” platinum group metals;
“Platinum Mile” Platinum Mile Resources Proprietary Limited;
“Qinisele Resources” Qinisele Resources (Pty) Limited;
“Registrar of Companies” the Registrar of Companies in England and Wales;
“Regulation” has the meaning given to it in paragraph 3(d) in Part A of
Appendix I to this Announcement;
“Regulatory Clean Team Protocol” the regulatory clean team protocol put in place by Sibanye-
Stillwater and Lonmin in relation to the disclosure of
competitively sensitive confidential information between
Sibanye-Stillwater’s external legal counsel and/or
economists and Lonmin’s external legal counsel and/or
economists for the purposes of obtaining the consent of
competition authorities and/or other regulatory clearances
in connection with the Offer;
“Regulatory Information Service” any of the information services set out in Appendix I to the
Listing Rules;
“Restricted Jurisdiction” any jurisdiction where local laws or regulations may result
in a significant risk of civil, regulatory or criminal exposure
if the Offer is extended or made available in that
jurisdiction or if information concerning the Offer or the
Acquisition is sent or made available in that jurisdiction;
“Restricted Overseas Person” Lonmin Shareholders resident in, or nationals or citizens
of, Restricted Jurisdictions or who are nominees or
custodians, trustees or guardians for, citizens, residents or
nationals of such Restricted Jurisdictions;
“RPM” Rustenburg Platinum Mines Limited (registration number
1931/003380/06), a public company duly incorporated and
registered under the laws of South Africa;
“Rustenburg Operations” the Bathopele, Siphumelele (including Khomanani), and
the Thembelani (including Khuseleka) mining operations,
two concentrating plants, an onsite chrome recovery plant,
the Western Limb Tailings Retreatment Plant, associated
surface infrastructure and related assets and liabilities;
“Scheme” the proposed scheme of arrangement under Part 26 of the
UK Companies Act between Lonmin and the Lonmin
Shareholders to implement the Offer, with or subject to any
modification, addition or condition approved or imposed by
70
the Court and agreed by Lonmin and Sibanye-Stillwater;
“Scheme Document” the document to be sent to Lonmin Shareholders
containing, amongst other things, the full terms and
conditions of the Scheme and the notices convening the
Court Meeting and the Lonmin General Meeting;
“Scheme Voting Record Time” the date and time specified in the Scheme Document by
reference to which entitlement to vote at the Court Meeting
will be determined, expected to be 6.00 pm (London time)
on the day which is two days before the Court Meeting or,
if the Court Meeting is adjourned, 6.00 pm (London time)
on the day which is two days before the date of such
adjourned Court Meeting;
“SEC” the US Securities and Exchange Commission;
“Sibanye-Stillwater” Sibanye Gold Limited (or if Sibanye Gold Limited elects, a
nominee or wholly-owned subsidiary of Sibanye Gold
Limited notified in writing to Lonmin prior to publication of
the Scheme Document (or, if applicable, the offer
document));
“Sibanye-Stillwater ADSs” American depositary shares, each of which represents four
Sibanye-Stillwater Shares;
“Sibanye-Stillwater Circular” the circular, containing (amongst other things) the notice of
the Sibanye-Stillwater Shareholder Meeting and the Forms
of Proxy attached thereto, relating to Sibanye-Stillwater
Shareholder approval of the allotment and issue of the
New Sibanye-Stillwater Shares for the purposes of the
Offer;
“Sibanye-Stillwater Directors” the directors of Sibanye-Stillwater;
“Sibanye-Stillwater Group” Sibanye-Stillwater and its subsidiary undertakings and,
where the context permits, each of them;
“Sibanye-Stillwater MOI” the memorandum of incorporation of Sibanye Gold
Limited, as amended from time to time;
“Sibanye-Stillwater’s Financial UBS and/or HSBC;
Advisers”
“Sibanye-Stillwater Shareholder the general meeting of Sibanye-Stillwater Shareholders
Meeting” (including any adjournment thereof), to be convened in
connection with the Sibanye-Stillwater Shareholder
approval of the allotment and issue of the New Sibanye-
Stillwater Shares for the purposes of the Offer, notice of
which will be sent out in the Sibanye-Stillwater Circular;
“Sibanye-Stillwater Shareholders” the holders of Sibanye-Stillwater Shares;
“Sibanye-Stillwater Shares” ordinary shares of no par value in the issued share capital
of Sibanye-Stillwater;
“Significant Interest” in relation to an undertaking, a direct or indirect interest of
71
20 per cent. or more of the total voting rights conferred by
the equity share capital (as defined in section 548 of the
UK Companies Act) of such undertaking;
“South Africa” the Republic of South Africa;
“South African Companies Act” the South African Companies Act, 2008;
“South African Financial Markets the South African Financial Markets Act, 2012, as
Act” amended;
“Stillwater” Stillwater Mining Company (file no. 2317621), a company
incorporated and existing under the laws of the State of
Delaware, United States;
“Stillwater Mine” Sibanye-Stillwater’s mining operation near Nye, Montana;
“STRATE” the settlement and clearing system used by the
Johannesburg Stock Exchange, managed by Strate
Proprietary Limited (Registration Number
1998/022242/07), a limited liability company duly
incorporated and registered under the laws of South Africa;
“Takeover Code” the City Code on Takeovers and Mergers;
“Takeover Offer” should the Acquisition be implemented by way of a
takeover offer as defined in Chapter 3 of Part 28 of the UK
Companies Act, the offer to be made by or on behalf of
Sibanye-Stillwater (and/or a wholly-owned subsidiary of
Sibanye-Stillwater) to acquire the entire issued and to be
issued ordinary share capital of Lonmin and, where the
context admits, any subsequent revision, variation,
extension or renewal of such takeover offer;
“Third Party” each of a central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory,
environmental, administrative, fiscal or investigative body,
court, trade agency, association, institution, environmental
body, employee representative body or any other body or
person whatsoever in any jurisdiction;
“TNW” has the meaning given in paragraph 4 to this
Announcement;
“UBS” UBS Limited and/or UBS South Africa (Pty) Ltd (as
applicable), Sibanye-Stillwater’s Financial Adviser;
“UK Companies Act” the UK Companies Act 2006, as amended;
“UKLA” the UK Listing Authority, being the Financial Conduct
Authority acting in its capacity as the competent authority
for the purposes of Part VI of the Financial Services and
Markets Act 2000;
“United Kingdom” or “UK” the United Kingdom of Great Britain and Northern Ireland;
“United States” or “US” the United States of America, its territories and
possessions, any state of the United States of America,
72
the District of Columbia and all other areas subject to its
jurisdiction and any political sub-division thereof;
“US Exchange Act” the US Securities Exchange Act of 1934, as amended;
“US Securities Act” the US Securities Act of 1933, as amended;
“Wider Lonmin Group” Lonmin and associated undertakings and any other body
corporate, partnership, joint venture or person in which
Lonmin and such undertakings (aggregating their
interests) have a Significant Interest; and
“Wider Sibanye-Stillwater Group” Sibanye-Stillwater and associated undertakings in which
Sibanye-Stillwater has a Significant Interest and any other
body corporate, partnership, joint venture or person in
which Sibanye-Stillwater and all such undertakings
(aggregating their interests) have a Significant Interest.
For the purposes of this Announcement, in relation to Lonmin, “subsidiary”, “subsidiary
undertaking”, “undertaking” and “associated undertaking” have the respective meanings given
thereto by the UK Companies Act and, in relation to Sibanye-Stillwater, “subsidiary” has the
meaning given thereto by the South African Companies Act.
All references to “Sterling”, “£”, “pence” and “p” are to the lawful currency of the United Kingdom.
All references to “US Dollar”, “US$” and “$” are to the lawful currency of the United States.
All references to “R” and “South African Rand” are to the lawful currency of South Africa.
All the times referred to in this Announcement are London times unless otherwise stated.
References to the singular include the plural and vice versa.
JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
73
Date: 14/12/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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