Xstrata said planning bid for Lonmin

SINGAPORE/NEW YORK (Reuters) - Swiss mining group Xstrata is planning an unsolicited takeover bid for platinum producer Lonmin, in a deal likely worth about $9 billion (4.6 billion pounds), the Financial Times reported on its website.

Senior Lonmin executives were made aware on Tuesday Xstrata was planning an offer, which took Lonmin by surprise, the FT reported. Citing a market insider, the FT said any offer from Xstrata would be in the high 20 pound range.

Lonmin shares rose 4.6 percent to close at 23.19 pounds on Tuesday, valuing the company at $6.8 billion. The shares have fallen from the year's high of 37 pounds hit in May.

Lonmin officials were not available for comment and an Xstrata spokeswoman in Australia declined to comment, but analysts said Xstrata's interim results due later on Wednesday may include more details.

Merger talks between Anglo-Swiss group Xstrata and Brazil's iron ore producer Vale collapsed in March.

Lonmin has been turning robust profits, boosted by record platinum prices. But in the past few months platinum prices have fallen -- down by a third to $1,562 an ounce from a record $2,290 in March -- and have dragged Lonmin shares with them.

Lonmin has also struggled to deal with power shortages that have hit metal producers across South Africa and problems at its smelter.

"There are further falls in store for precious metals, but the bigger picture is that they will come back up again, and as equity prices have softened in line with the underlying commodity, this is probably a cheap buy," said Peter McGuire, managing director of Commodity Warrants Australia.

Several big Lonmin shareholders have been keen to attract a buyer, the FT said, but added that market insiders said Sir John Craven, the group's chairman, was reluctant to consider a bid.