South Africa’s Northam Platinum’s shares fell on Wednesday after the company made a formal offer to acquire mid-tier miner Royal Bafokeng Platinum , escalating a takeover battle with bigger rival Impala Platinum.
Northam’s shares were 6.56% down, while RBPlat’s shares were up 9.55% at 1018 GMT.
Impala’s plans to buy RBPlat, announced last November, were immediately followed by Northam’s announcement that it had acquired a 33% stake in the miner, triggering a bidding war that has gone on for months and shows no sign of abating.
“Northam is pleased to announce its intention to pursue the business combination by way of a voluntary offer by Northam Holdings to RBPlat shareholders to acquire all the RBPlat Shares in issue… for an offer consideration representing 172.70 rand ($9.72) per offer share,” the company said.
Both Northam, which currently owns 34.52% of RBPlat, and Impala, the biggest shareholder with 40.71%, covet RBPlat’s large, shallow, high-quality assets.
Impala is one of the world’s top five platinum producers, with 2.27 million ounce platinum group metal production in 12 months to June 30 2022. Northam seeks to add RBPlat’s output to its 716,488 ounce 2021 production as part of its strategy to scale the 1 million ounce threshold. RBPlat produced 467,000 ounces in 2021.
Northam, which plans to issue a circular for the transaction on Dec. 7, said its offer could be all cash or a combination of cash and shares. Impala’s offer is a split of 90 rand cash and 0.3 Impala shares.
If Impala Platinum does not accept the offer, then Northam said it would pay 152.42 rand in cash and the remaining 20.28 rand in shares.
Impala Platinum told Reuters it was reviewing Northam’s announcement.
South Africa’s state-owned fund manager, Public Investment Corporation, holds 9.42% of RBPlats, making it a potential kingmaker in the bidding war. The PIC is also the biggest shareholder in both Impala and Northam, with 20% and 17%, respectively. ($1 = 17.7671 rand) (Reporting by Nelson Banya Editing by Tomasz Janowski and Louise Heavens)