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Lonmin's (LSE:LMI) share price ranged around Xstrata's proposed bid price for the company at between £33.94 and £31.94 on the LSE today, perhaps indicating that the market is not expecting a counter offer for the platinum company or that Xstrata will not raise its bid.

This comes amid fierce opposition to the Xstrata bid from Lonmin, which contends the company has great prospects and is being undervalued by Xstrata. There have also been reports that Xstrata will have to "sweeten" its bid for the platinum major.

Interestingly, Xstrata had dusk and dawn raids preceding and post its announcement of its proposed bid that saw the company acquiring 11% of Lonmin shares at its bid price of £33/share. This could be the result of shareholders wanting to cash in on the proposed deal early, instead of waiting out the lengthy competition approval process in South Africa before finally getting cash for its shares.

Xstrata's early acquisition of about 11% of Lonmin's shareholding is also the reason why the company does not have the finance in place yet to make a formal bid for the platinum miner. Xstrata would have approached the same institutions which hold interests in Lonmin for deal finance, showing its hand before formally announcing its bid.

Asked today whether obtaining finance for the bid was a problem, an official Xstrata spokesperson said the company had no concerns around financing the bid. The 2 October deadline set by the UK Takeover Panel this week for the company to raise the finance was in line with its plans and process.

Commenting on safety issues around deep-level platinum and gold mining in South Africa, spokesperson Michael Oke said Xstrata carefully thought through the bid before making a move. The company's view was that Lonmin had shallow operations compared to some platinum operations, and Xstrata had the benefit of having mined from the same orebodies as Lonmin.

Oke also mentioned that Xstrata was not against Lonmin's strategy of "universal" mechanisation in order to reduce costs and improve safety, but would probably not implement mechanisation across all operations.

It is still early days in the life of the Xstrata bid for Lonmin but perhaps the share price underlines the allegations and an institutional shareholder statement that investors have  grown frustrated with an apparent lack of direction and underperformance by the company.

Tags: Lonmin, Xstrata, Xstrata bid for Lonmin.