Stillwater Mining Co. v. Sibanye Gold Ltd.


Linklaters U.S. trial lawyers have won a significant victory for Sibanye Gold Ltd. before the Delaware Chancery Court against Stillwater Mining Co.

Sibanye Gold Ltd. acquired Stillwater Mining Co. in May 2017 for $18 per share. Following the acquisition, several Stillwater shareholders filed an appraisal petition with the Delaware Chancery Court, arguing that Stillwater’s fair value was in fact $25.91 per share, based on a discounted cash flow analysis prepared by their expert witness. Following a trial and extensive post-trial briefing, the court rejected the petitioners’ claims and found instead that the deal price of $18/share was the best indicator of fair value.

Following a bench trial in Delaware in December 2018, the court found that the most persuasive measure of fair value was the deal price of $18/share, concluding that Sibanye proved that the sale process made the deal price a reliable indicator of fair value. This is a significant victory, and an important decision because it provides critical guidance to companies concerning when their sale processes will be deemed sufficiently reliable to make the deal price an appropriate indicator of value.

Sibanye-Stillwater is the largest individual producer of gold from South Africa and is one of 10 largest gold producers globally.

The Linklaters team included partners James Warnot (Picture), Adam Lurie and Brenda DiLuigi, senior US associates Nicole Jerry and Elizabeth Raulston, and US associates Menaka Nayar, Sean Mooney, Michael Pilcher, Ellen Gong, Somin Lee, and Charlene Warner.

Involved fees earner: Brenda DiLuigi – Linklaters; Ellen Gong – Linklaters; Nicole Jerry – Linklaters; Somin Lee – Linklaters; Adam Lurie – Linklaters; Sean Mooney – Linklaters; Menaka Nayar – Linklaters; Michael Pilcher – Linklaters; Elizabeth Raulston – Linklaters; Charlene Warner – Linklaters; James Warnot – Linklaters;

Law Firms: Linklaters;

Clients: Sibanye Gold;

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Author: Ambrogio Visconti