Both Impala Platinum (Implats) and Northam Platinum have added to their stakes in Royal Bafokeng Platinum (RBPlat) as the two continue to compete for a larger share of the business.
On Tuesday evening, Northam announced it has acquired additional shares in RBPlat, increasing its shareholding from 32.8% to 34.95%
On Wednesday morning, Implats announced it has now built up its stake in RBPlat to 32.26%. Implats last week announced it had acquired 24.5% of RBPlat shares from institutional shareholders and would extend the same offer to remaining shareholders. That is, R150 per share, consisting of R90 cash plus 0.3 ordinary shares in Impala.
The bidding war for RBPlat has market observers worried that it denotes the top of the cycle behavior when cash-flush miners buy assets at high prices when commodity prices peak. Implats and Northam however consider RBPlat as a rare opportunity to acquire a quality Platinum Group Metals asset.
It was first thought that only Implants was in the market to acquire RBPlats when it warned the market in October that the two were in acquisition talks.
Northam appeared to come out of the left-field last month when it announced it had brokered a deal directly with Royal Bafokeng Holdings (RBH), RBPlat’s parent company, to acquire its shares in the platinum business at R180 a share.
While some assumed Implats to be out of the running, the miner announced its acquisition of the 24.5% stake as it extended the offer to remaining shareholders with an aim of ultimately acquiring at least 51% of RBPlat’s shares.
In Tuesday’s announcement, Northam said the further acquisitions were implemented at a volume-weighted average cash consideration of R162.70 per RBPlat Share and at a maximum cash consideration of R165.00 per RBPlat Share.
The company has now also secured an option and a right of first refusal agreement with Emikaway (EMI) – a wholly-owned subsidiary of Royal Bafokeng Holdings – which could potentially see Northam’s shareholding increase to 38.27 % in time.
Northam said it will make further announcements once the required regulatory clearances have been obtained.
Implats, on Wednesday, said it may acquire further RBPlat shares still and will make further disclosures and announcements when appropriate.