Northam Platinum Holdings announced on Tuesday a deal of around R17 billion to secure a significant one-third stake in Royal Bafokeng Platinum (RBPlat), effectively beating publicly traded miner Impala Platinum’s (Implats) plans to buy and dispose of. to RBPlat.
Disclosing the deal in a statement from Sens, Waterfall City-based Northam said it had entered into a share sale agreement on Monday, November 8 with Royal Bafokeng Holdings Proprietary Limited (RBH) and Royal Bafokeng Investment Holding Company Proprietary Limited. (RBIH). which will allow it to acquire up to 33.3% of all the ordinary shares of RBPlat in issue.
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RBIH is a wholly owned subsidiary of RBH.
The move comes just two weeks after Implats and RBPlat jointly announced that talks were underway for Implats to acquire 100% of RBPlat’s issued common shares.
Read: Royal Bafokeng Platinum Launches Nearly 20% of Implats Proposed Purchase Offer
“Northam will acquire 93 930 378 shares of RBPlat from RBIH, equivalent to 32.8% of the net shares of RBPlat, for an aggregate purchase consideration of [circa] R17 billion
which represents R180.50 per RBPlat share, ”the group noted in its Sens statement Tuesday morning.
“The consideration for the purchase will be settled through a combination of the issuance of ordinary shares in the capital stock of Northam Holdings and cash,” he said.
“The parties have entered into a call and put option agreement under which Northam may acquire an additional 0.5% of the net shares of RBPlat for a purchase consideration of R135 per RBPlat share. If RBIH’s call and put option is fully exercised, Northam will acquire 33.3% of RBPlat’s net shares in total, ”he added.
It is worth noting that Northam’s main offering price of R180.50 per share is a significant premium to the current RBPlat share price.
RBPlat’s share price was 6% weaker (at R113.20 per share) in morning trading after the latest announcement. Northam shares tumbled more than 12% to just under R214 per share.
Meanwhile, in Sens statements released separately on Tuesday, Implats and RBPlats announced the withdrawal of the warning related to Implats’ 100% non-binding purchase offer.
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“Implats shareholders are referred to the Joint Caution Announcement published in Sens by the company and RBPlat on October 27, 2021 and to the warning withdrawal published by RBPlat today, November 9, 2021, in terms of which RBPlat stated that has been informed by its largest shareholder RBH that it no longer supports the transaction mentioned in the Joint Warning Announcement and that, to the extent that it owns shares in RBPlat, it will vote against the proposed settlement scheme mentioned in the Joint Warning Announcement ” , Implats noted in his last Sens.
“Since the agreement outline cannot be implemented without the support of RBH, Implats will no longer proceed with the transaction as mentioned in the joint Warning Announcement and, therefore, Implats shareholders should no longer exercise caution when negotiating with company values ”, he added.
Regarding its agreement, Northam noted that the RBPlat transaction is aligned with its operational diversification strategy.
“The completed transaction with Royal Bafokeng Holdings gives Northam a strategically significant stake in RBPlat, creating significant long-term optionality for Northam. It aligns perfectly with our long-term growth, sustainability and diversification strategy and the introduction of Royal Bafokeng Holdings as a major shareholder further strengthens our empowerment credentials, ”said Paul Dunne, Northam CEO.
“We are excited about the long-term value creation potential and inherent optionality that the transaction presents. In particular, we believe that RBPlat’s complementary metal mix, with a higher relative contribution from platinum, fits well within Northam’s broader basket of metals, ”he added.
Royal Bafokeng Holdings CEO Albertinah Kekana said the group is pleased to become a major strategic shareholder in Northam, while “realizing a significant unlocking of value” from its long-term investment and its commitment to RBPlat.
Equally important with this transaction is that Northam will partner with RBH and the RBN [Royal Bafokeng Nation] to deliver a series of high-value, high-impact community initiatives for the RBN and the region as a whole, including the employees and communities associated with RBPlat. ”