Leading analysts have suggested that Xstrata will play a waiting game as it mulls over whether to make a formal offer for platinum producer Lonmin.

The firm is believed to have readied a bid worth $10 billion - which prices shares at £33 each - and has been set an October 2nd deadline to make an official bid by UK takeover regulators.

However, platinum prices are on the slide and mining shares are currently experiencing a period of volatility, leading some commentators to suggest that Xstrata will bide its time before deciding whether to walk away.

One hedge fund manager with a Lonmin holding said: "The best (tactic) is to let the market sweat as much as possible.

"Everybody gets nervous, the more people get nervous, the more shares they will eventually get."

Lonmin was believed to be holding out for an offer closer to £38 per share but now Xstrata, which has bought a 10.7 per cent stake already, is holding fire as prices drop.

Liberum Capital analyst Michael Rawlinson added: "This was a smart move by them as they have changed the mentality of the institutions from one where they are holding
out for a bump (up in the offer price) to one where they are begging for a confirmed bid by the put-up or shut-up date on October 2nd."



Source:

Xstrata plays hardball on Lonmin as shares slide (12/09/08)
http://www.reuters.com/article/innovationNews/idUSLC51659620080912