It is busy digesting its acquisition of Southern Platinum which had struggled to make a new platinum mine work

It is busy digesting its acquisition of Southern Platinum which had struggled to make a new platinum mine work. Lonmin has also suffered two explosions at its new smelter in South Africa. It is about to buy Australia’s Tethyan Copper for £80m in a joint bid with Antofagasta. It recently acquired its first platinum project in South Africa and sealed the takeover of the Canadian gold producer, Placer Dome.Another possible bidder is the Switzerland-based Xstrata, which lost out in two recent takeover battles. Last year it was beaten by BHP Billiton in the battle for Australia’s WMC and later failed in its bid for Canada’s Falconbridge Some now believe it is desperate to do a deal. Xstrata’s chief executive, Mick Davis, is believed to have long held ambitions to return to South Africa for an acquisition.

An acquisition would also help ward off unwanted advances from large players such as BHP.John Meyer, at Numis, said Xstrata was generating substantial cash of about $2bn (£1.1bn) a year and could easily afford to acquire Lonmin or its larger rival, Impala Platinum. But he warned: “We do not believe Lonmin shares justify the current valuation The talks may be over or may fall through. We urge investors not to get carried away with this current ‘irrational exuberance’.”Analysts said the world’s largest and second-biggest platinum producers, Anglo Platinum and Impala, would find it hard to bid because of competition concerns.Lonmin has long been viewed as vulnerable to a bid. The shares jumped 25 per cent to a record high of 2,671p, giving the group a market value of £3.75bn.
News of the approach sent shares in other miners up strongly. Anglo-American rose 123p to 2,145p, making it the best performer in the FTSE 100.Market speculation centred on Canada’s Barrick, the world’s largest gold mining group, which has been acquisitive of late. Last week, Steve Holliday, the chief executive-designate, signalled his intention to make further acquisitions in the region.Robert Catell, KeySpan’s chief executive, said talks with several parties may not necessarily result in a bid.

“However, as our industry has evolved, we believe it is appropriate to explore all alternatives that may be in the best interests of all our stakeholders, particularly the customers we serve,” he said.KeySpan shares have fallen 10 per cent in a year because higher wholesale gas prices forced the company to raise prices, driving down customer usage and causing more to fall behind with their bills.. News that the platinum mining group, Lonmin, had received a bid approach sent its shares soaring yesterday and hopes of further consolidation in the sector sparked a global rally in mining stocks. Lonmin, the world’s third-largest platinum producer, chaired by the former Morgan Grenfell chief executive Sir John Craven, stressed that discussions with an unnamed suitor were at a “very preliminary stage”. It broke into the US market in 2000 with purchases of the electricity transmission and distribution companies, NEES and EUA, for a total of $5.6bn. Two years later it unveiled the $9bn acquisition of Niagra Mohawk.The US utilities landscape is being dramatically reshaped after pressure from companies to liberalise laws that limit inter-state mergers.