Xstrata, the Anglo-Swiss mining group, has bid £5 billion for Lonmin, claiming that the platinum producer has underperformed in a booming market.

Lonmin rejected the offer yesterday, calling it “opportunistic and entirely unwelcome”, but Xstrata has bypassed the company's management and is putting the deal to investors.

The London-listed miner has bought 10.6 per cent of Lonmin's stock and its offer price of £33 a share is a 42 per cent premium to the £23.19 close on Tuesday.

Lonmin has struggled with production problems in the past year, including smelter shutdowns and power disruptions at its mines in South Africa. The world's third-largest producer of platinum expects to mine 725,000 ounces of the precious metal this year, which is 19.5 per cent lower than estimates it made last year. The latest downgrade came last night.

The timing of Lonmin's problems has frustrated investors, as the platinum price hit a record of $2,280 in March and has remained higher than $1,500. Xstrata has positioned itself as a white knight for Lonmin investors, offering them a significant premium for their shares and promising to revitalise the business. The company said: “Xstrata believes that Lonmin's operations are attractive, but that a significant transformation of operating and management practices is required to return Lonmin to its former growth trajectory.”

Shares in Lonmin closed up nearly 48 per cent, or £11.07, at £34.62 last night. However, Lonmin management said: “This is an opportunistic and entirely unwelcome attempt to acquire Lonmin at a price which undervalues its unique assets.” Analysts said yesterday that a rival bidder was unlikely to emerge, as potential candidates, such as Anglo American, would face competition issues. Others, such as Vale, of Brazil, lack the necessary experience in platinum and South Africa to integrate Lonmin.

Michael Rawlinson, a Liberum Capital mining analyst, said: “We sense a lack of approach [to Lonmin] shows the disdain Xstrata have in the incumbent management team and the very low value they place on getting a recommended offer.”

Mick Davis, the chief executive of Xstrata, said: “Our proposed offer will provide Lonmin shareholders with an opportunity to realise a cash premium for their investment, which fully and fairly values Lonmin's operations and growth potential, while acknowledging the risks, time and investment involved in a turnaround of this scale and nature.”

Xstrata, which floated in London in 2002 with a market capitalisation of £1 billion, is worth £33 billion after several large acquisitions. The company said that its debt was $14.8 billion (£7.6 billion) and would rise to $24 billion if the Lonmin bid succeeded. This represented a gearing ratio of 47 per cent, but Trevor Reid, the chief financial officer of Xstrata, said that the company could cope with this level of debt. He said that Xstrata had not arranged the debt needed to buy Lonmin, but he did not envisage any problems. “Half the e-mails I have had this morning have been from banks wanting to get involved,” he said.

Rebecca O'Dwyer, an Investec mining analyst, said: “We find it difficult to see any other bidders coming out of the woodwork for Lonmin, so unless shareholders reject the deal, we believe it is likely to go ahead, although we can justify an offer price up to £35 per share.”

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