This is not a paywall.

Register for free to continue reading.

The news sucks. But your reading experience doesn't have to. Help us improve that for you by registering for free.

Please create a password or click to receive a login link.

Please enter your password or get a login link if you’ve forgotten

Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We write for you

It’s a public service and we refuse to erect a paywall and force you to pay for truth. Instead, we ask (nicely and often) that those of you who can afford to, become a Maverick Insider and help with whatever you can. In order for truth not to become a thing of the past, we need to keep going.

Currently, 18,000 (or less than 0.3%) of our brave and generous readers are members; which says a lot about their characters and commitment to our country. These people are paying for a free service in order to keep it free for everyone.

They are the true South AfriCANs.(Sorry, we couldn’t help ourselves.)

Support Daily Maverick→
Payment options

Battle for South African Platinum Miner Comes to a Boil

Business Maverick

Business Maverick

Battle for South African Platinum Miner Comes to a Boil

A logo sits on a wall at the entrance of the Northam Platinum Ltd. Booysendal platinum mine outside the town of Lydenburg in Mpumalanga, South Africa, on Tuesday, Jan. 23, 2018. Booysendal will use a system developed by an Austrian company that builds ski lifts to transport the ore up a 30 degree incline out of a valley for processing, instead of the traditional conveyer used throughout South Africa or the more expensive option of trucking. Photographer: Waldo Swiegers/Bloomberg
By Bloomberg
10 Dec 2021 0

Tensions in the takeover battle for one of South Africa’s smallest platinum miners -- Royal Bafokeng Platinum Ltd. -- ratcheted up on a day littered with statements to the Johannesburg Stock Exchange

It kicked off with Royal Bafokeng, also known as RBPlat, announcing that Northam Platinum Holdings Ltd. had made an unsolicited approach to buy some or all of its shares. Later, Northam said the stake it has built in RBPlat so far won’t trigger a mandatory offer to all shareholders. Soon after, rival Impala Platinum Holdings Ltd. said it now owns 35.31% of RBPlat as it seeks control of a miner that’s key to prolonging the life of its own deep-level operations.Implats revived its pursuit of the smaller producer at the end of last month, following Northam’s swoop to buy out RBPlat’s biggest shareholder. Implats has long wanted to own RBPlat’s low-cost mechanized assets, which lie adjacent to its own Rustenburg mining complex. Now Chief Executive Officer Nico Muller faces a battle with Northam counterpart Paul Dunne.

“It’s going to be who comes up with the best offer,” said Rene Hochreiter, an analyst with Noah Capital Markets Ltd. “Northam is going to have to make it a cash offer because Implats is going to come up with a cash offer.”

RBPlat said Northam’s unsolicited approach includes no offer details, with the latter asking to undertake due diligence. Earlier talks with Northam over a possible bid ended after its board rejected a non-binding offer letter dated Oct. 11, RBPlat said.

On Nov. 29, Implats offered 150 rand in cash and shares to RBPlat shareholders, valuing the company at about 43.4 billion rand ($2.7 billion). That bid, supported by RBPlat’s board, came after Northam agreed to pay 180 rand a share for a 32.8% stake in RBPlat. Northam has since raised its holding in RBPlat to 34.95%, and said on Tuesday that it has options to increase that stake to 38.27%.

Takeover Rules

Northam would be required to pay 180 rand a share to other RBPlat investors if it makes a general offer within six months, according to RMB Morgan Stanley analysts. Under South African takeover rules, a mandatory offer to other shareholders would be triggered if its RBPlat holding rises to 35%.

South Africa’s Public Investment Corp., the continent’s largest money manager, is an interested observer. It holds about 10% of RBPlat, but also has stakes Implats and Northam, and said it would support “any transaction that can demonstrate benefits for its clients.”

The ball appears to be in Northam’s court as it weighs an offer, although operational considerations may also play a part. The potential synergies between RBPlat and Northam are less compelling than those with Implats, said Shane Watkins, chief investment officer at All Weather Capital Ltd.

“The risk is that Northam overpays given their lack of mining synergies with the Royal Bafokeng assets,” Watkins said.


Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted