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12/9/16

Thinking of buying a company, CEO? Let Sibanye (SBGL) be a lesson to you

  • In theory at least it's the right time in the cycle for an all-cash buyout.
  • The fit is a reasonably good one, both on production and geopol risk terms.
  • When I read the NR this morning I thought it a good deal and it turned out that I wasn't alone, with one industry pal calling it "probably the most logical/stable deal on the table in 2016".

 But none of that stopped Sibanye (SBGL) from dropping 15% at the open this morning:



It's a tough market for mining M&A right now, worth keeping that in mind. Here's how the NR kicked off:

LITTLETON, Colo., Dec. 9, 2016 /PRNewswire/ -- Stillwater Mining Company ("Stillwater" or "the Company"; NYSE: SWC) today announced that it has entered into an agreement with Sibanye Gold Limited ("Sibanye"; JSE: SGL; NYSE: SBGL), under which Sibanye will acquire Stillwater for $18.00 per share in cash representing an aggregate enterprise value of $2.2 billion. The $18.00 per share transaction price represents a 61% premium to Stillwater's volume-weighted average share price over the 52 weeks prior to the announcement of the transaction, a 25% premium to its volume-weighted share price over the 30 trading days prior to the announcement and a 23% premium to its closing share price on December 8, 2016.  The transaction also represents a 14.0x multiple of IBES consensus 2017 EBITDA1 estimate.
Following a thorough review of Stillwater's strategic opportunities, including a process in which over 20 parties were contacted, the Company's Board of Directors has unanimously approved the transaction. continues here