JCI sells Johnson Matthey stake to fund Lonrho deal
MZI Khumalo's JCI has taken the first step in financing its acquisition of a 26.8% stake in UK mining house Lonrho. JCI said on Friday it had sold its 8.7% interest in platinum marketing group Johnson Matthey for £105-million in an effort to fund the Lonrho acquisition.
The total cost of the Lonrho holding, which JCI agreed to buy from Anglo American in June, is R2.5-billion. JCI will have to raise the funds by December this year.
"The cash proceeds from the sale of the Johnson Matthey stake will be used to partially fund the acquisition of the Lonrho shares," JCI said.
Analysts had been expecting the Johnson Matthey sale and are speculating on other options such as the sale or merger of JCI's unlisted Tavistock coal division with Lonrho and the disposal of non-core assets like the 9.8% stake in Anglo American Platinum.
JCI said it had sold its 18.9-million share stake in Johnson Matthey through investment bank SBC Warburg at £5.55 a share. Johnson Matthey chief executive Gordon Thorburn told Reuters he understood the stock had been placed with a number of institutional investors.
JCI acquired the Lonrho stake after Anglo American's efforts to buy Lonrho were foiled by the European Union competition authorities.
Khumalo has recently expressed confidence that a formal merger with the UK group, previously rejected by the Lonrho board, will still go ahead.
The sale significantly boosted trading volume in Johnson Matthey, making it one of the most active stocks in the London market.
The disposal comes after Anglo American's offshore arm Minorco sold its similar-sized stake in Johnson Matthey in June last year.