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Northam & Implats fight it out again for control of RBPlat

mining excavator onsite at night

Northam Platinum is back to fighting with Impala Platinum (Implats) as it makes a formal offer to buy all the Royal Bafokeng Platinum (RBPlat) shares it doesn’t already own for R172.70 each.

According to IOL, Northam said that the offer price of R172.70 is the same as the purchase price of R180.50 paid to Royal Bafokeng Holdings (RBH) in November 2021, with dividends of R5.35 in March 2022 and R2.45 in August 2022 taken into account.

It was said that the price of the offer was about 15% more than the value of Implats offer on November 8.

Northam owns 34.52% of RBPlat right presently.

Rival Implats has just over 40% of RBPlat so far.

Northam’s CEO, Paul Dunne, said, “The offer is in line with Northam’s growth plan and offers a rare chance to buy a majority stake in a scant, high-quality ore deposit with established and well-capitalized infrastructure.”

“We are sure that Northam and RBPlat make sense for everyone involved, and that RBPlat’s attractive asset base has intrinsic worth and growth potential that can be used to unlock and create value.”

He said that Northam’s balance sheet, liquidity position, and credit outlook had all improved a lot since it bought its first RBPlat shares. This made it possible for Northam to make an offer to RBPlat shareholders that included a convincing cash consideration and an appealing premium while restricting the number of Northam shares that would be issued.

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Northam has committed R10 billion for the payment and has kept the right to increase this amount. Based on the upfront cash commitment of R10 billion, if RBPlat shareholders who own less than 19.9% of all RBPlat shares in circulation take the offer, the offer consideration will be paid in full in cash,” the statement said

Now, an independent board of directors will look at Implats and Northam’s offers and decide what was fair and reasonable for RBPlat shareholders.

It said that at this point, the “Independent Board does not express any opinion or advice on the merits of the Offer.”

Seleho Tsatsi, an investment analyst at Anchor Capital, said that Northam’s offer could make its balance sheet more vulnerable if the prices of platinum group metals (PGM) dropped significantly over the next year or so.

“If PGM prices stay the same, Northam should be able to cover a large part of the potential R10 billion cash consideration in its offer with free cash flow from its own operations,” he said.

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