The scramble for the control of Royal Bafokeng Platinum (RBPlat) took another twist on Thursday after Impala Platinum (Implats) withdrew its objection against the increased cash component of the offer tabled by Northam Platinum in December.
For more than a year Implats and smaller rival Northam have been slugging it out to gain majority control of Northam’s coveted ore body.
On December 12 Northam increased the cash portion of its bid by R7bn to R17bn to which Implats objected through the Takeover Regulation Panel (TRP).
But on Thursday Northam said the mergers & acquisition watchdog had granted it approval to proceed with its takeover proposal.
But Camissa Asset Management portfolio manager Mandi Dungwa said Northam’s share price has declined significantly since the offer price was made and will be a key consideration for its shareholders when evaluating the offer.
“The RBPlat operating performance has also deteriorated over the last year particularly at their Styldrift mine and that would be a further consideration for the shareholders of Northam when deciding on whether to vote for this transaction at the current offer price,” he said.
RBPlat said on Wednesday that the extended battle is limiting its ability to pursue growth plans, with some personnel opting to leave due to uncertainty.
“The uncertainty caused by the delay in finalising the corporate action is what has become a key risk to managing our people, their morale and retention,” RBPlat CEO Steve Phiri said in the company’s 2022 financial results presentation.
“We are unable to formulate a long-term strategy and implement aspects of our current strategy, which includes growth. Our capital allocation abilities are constrained.”
RBPlat said the bidding war could drag on well into the latter part of 2023, adding to the uncertainty.
Implats owns about 40.71% of RBPlat and Northam about 34.52%. The Public Investment Corporation (PIC) is the potential kingmaker with a shareholding of 9%, and is set to decide soon which of the two bidders it will back.
The PIC is the biggest shareholder in Implats and Northam, owning 20% and 17%, respectively.
A week ago, Implats CEO Nico Muller voiced frustration at the many delays the group faced in its proposed acquisition, though he said Implats was still “very serious to get to a position of control”.
Implats has been pursuing RBPlat for more than a decade, seeing an opportunity to own low-cost, mechanised shafts, and to extend the life of its own ageing, deep-level operations in Rustenburg.
The move by Northam underlines CEO Paul Dunne’s strategy to boost its output of platinum, which is used to reduce carbon emissions in internal combustion engines, and jewellery.
In a separate trading update on Thursday, Northam said headline earnings per share would rise by 62.3% to 72.3% in the six months ended December.
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