Tussle for control of RBPlat hots up
• Northam makes a formal bid for the PGM miner at centre of a battle for control with Implats
The takeover battle for control of Royal Bafokeng Platinum (RBPlat) escalated on Wednesday after Northam Platinum put in a formal bid, ratcheting up pressure on Impala Platinum (Implats) to put up a fight for its long-standing target.
In an offer that values RBPlat at about R50bn, Northam offered R172.70 a share in cash and shares for the company, which is coveted for its vast, shallow platinum reserves, topping a R150 per share open-ended offer from Implats.
The takeover war has been raging for months and rests on the idea that platinum group metals (PGMs) will have a place in a cleaner, environmentally friendly world as countries such as Germany and SA detail plans to become leaders in the hydrogen economy.
Implats has been pursing RBPlat for more than a decade, seeing an opportunity to own low-cost, mechanised shafts, and to extend the life of its own ageing deep-level operations in Rustenburg.
It has already bought 41% of the company through an openended offer launched soon after Northam signed a deal with what was then the largest shareholder in RBPlat to buy a onethird stake.
The move by Northam underlines CEO Paul Dunne’s stated strategy to boost the company’s output of platinum, which is used in electrolysers to make hydrogen and fuel cells powering cars, trains and ships.
“RBPlat generates strong cash flows from two established and well-capitalised mines that access scarce, shallow, highquality PGM mineral resources contained within both the Merensky and UG2 ore bodies,” Northam said in a statement.
“These ore bodies are well understood and have premium loadings of those PGMs, particularly platinum and rhodium, essential to the global clean-air imperative, as well as the burgeoning hydrogen economy.”
For RBPlat, the tussle is turning out to be a boom for its shareholders. On Wednesday, shares in the company surged 10.2%, the biggest one-day percentage gain in about a year.
“Given that now both Implats and Northam have made competing offers for the remaining RBPlat shares available, it will be up to minority shareholders to decide which offer to take up, or whether to continue to retain their shares,” said Rowan Williams, an analyst at Nitrogen Fund Managers.
KINGMAKER
The Public Investment Corporation, the custodian of more than R2.5-trillion in government employees’ pensions, is the kingmaker in the tussle as it holds more than 9% of RBPlat. It is also the biggest shareholder in Impala and Northam, with 20% and 17%, respectively.
RBPlat did not comment on the commercial and industrial merits of Northam’s proposal, which offers to pay at least R152.42 in cash and the balance in shares.
Northam’s offer, which commits up to R10bn in cash, is subject to approval by shareholders, who largely stood by Dunne’s side in the mid-2010s when he pumped money into the company’s mines in pursuit of a target of 1-million ounces when rivals were cutting spending.
Mandi Dungwa, a fund manager at Camissa Asset Managers, said: “It’s difficult to know what RBPlats shareholders are going to do but certainly from a Northam perspective to proceed with this transaction they will require the majority of Northam shareholders to approve this transaction and that may prove difficult given the significant premium proposed for the transaction.”