Xstrata is set to raise £5 billion of funds to aid its bid for platinum rival Lonmin.

It is thought that Royal Bank of Scotland, Barclays and Deutsche Bank are expected to be involved in the deal with some of the money used to restructure Xstrata's existing loans.

Lonmin has already rejected an advance from Xstrata after turning down an offer of £33 per share last week.

But a formal offer is expected when the firm has sorted its financial situation.

According to reports in the Times, the offer is expected to be preconditional with a rule used to allow bids to be made without the normal UK bid timetable.

South Africa's competition authority would then approve the deal but this could take some time, meaning that Xstrata does not want to activate a UK timetable in case the authorities are slow to approve a deal.

But Lonmin may still reject any advances after it said a preconditional offer was "opportunistic" and "entirely unwelcome".

Source:

Xstrata digs up £5bn for raid on Lonmin, 10/08/08
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4493814.ece

Lonmin rejects Xstrata's pre-conditional offer, 07/08/08
http://www.lonmin.com/index.aspx