Impala Platinum will buy out the remaining shareholders in Royal Bafokeng Platinum (RBPlat) before delisting it from the JSE as the next phase of its integration process begins in earnest.
Implats edged out its rival, Northam Platinum, to gain control of the mid-tier platinum group metals (PGMs) producer in May, 18 months after launching its takeover offer that had many twists and turns during the intervening period.
More than 90% of RBPlat shareholders have already accepted the offer, including Northam, which agreed to sell its 34.5% stake over the past week for R13bn.
Northam will receive about R9bn in cash, as well as the 3.3% stake in Implats valued at about R4.1bn at current prices.
Northam CEO Paul Dunne said last week the sale would provide it with a potential buffer against the uncertain outlook in the PGM market. Northam is also exploring using the proceeds to pay a maiden dividend or embark on a share buyback or reduce debt.
For Implats CEO Nico Muller, the immediate task will be the integration of the acquired assets, which he had cherished for many years.
The 90% threshold enables Implats to acquire the remainder of the shares, according to the Companies Act. Implats currently owns 98% of the issued shares.
The closing of the transaction comes at the time when prices of PGM, which are primarily used to cut harmful emissions in internal combustion engines and jewellery, are a lot lower relative to 2021 when they reached historic highs.
However, Implats has long maintained the deal would boost its future production profile as its existing mines become mature and depleted. The date of the intended delisting is yet to be decided, Implats said in a statement on Monday,
RBPlat, envied for large, shallow and high-quality assets, was listed on the JSE 13 years ago.
The news will come as another blow to the JSE, which has been trying to stem the wave of delistings in the small- to medium-cap categories in particular while initial public offerings have few and far between
More than 20 companies were delisted from the share market in 2022 for various reasons, which included mergers and acquisition activity.
RBPlat shares were down to R130 in early afternoon trade on the JSE, valuing it R37.7bn. Implats was, however, up 1.60% to R131.04.
RBPlat is among a handful of big BEE mining companies listed on the JSE, along with Exxaro Resources and Patrice Motsepe's African Rainbow Minerals.
“Given the adverse market developments resulting in falling profit margins and cash generation capacity constraints, some form of consolidation is warranted,” said Makwe Masilela, chief investment officer at Makwe Fund Managers.
“And unfortunately, the big boys will always have an advantage regardless of whether BEE companies get to be swallowed. I guess that’s the harsh reality of a free-market system that we’re facing.”
Aeon Investment Management chief investment officer Asief Mohamed said the advantage of Implats buying out all the shareholders of RBPlat is that the black shareholders are paid a significant premium, which they otherwise would not have received if Implats had not put the offer on the table.
“All shareholders now have an opportunity to recycle these proceeds into other investment opportunities, including reinvesting in the PGM mining companies or paying out the proceeds to the beneficiaries of the broad-based schemes. The RBPlat workers should hopefully also benefit from this buyout,” Mohamed said.
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