Impala victorious in RBPlat bid battle
ZIMPLATS parent company, Impala Platinum (Implats), has emerged victorious in its battle for control of Royal Bafokeng Platinum (RBPlat) after rival company Northam Platinum sold its stake.
In January 2022, Implats made an offer to acquire all outstanding shares of RBPlat, but it faced delays due to Northam’s intention to make a counteroffer. However, Northam’s plans were terminated in April, allowing Impala to move forward with its bid.
The sale of Northam’s 34.5% holding will increase Impala’s stake in RBPlat to 91%. As a result, shares in Northam rose by 8.68% following the announcement. The transaction will see Northam receive 9 billion rand ($505 million) in cash and approximately 30 million Impala shares.
Johan Theron, the spokesperson for Impala, expressed that the sale represents a positive outcome for all parties involved. He stated that Impala’s focus now shifts towards integrating RBPlat into its operations and providing value for its shareholders. Moreover, with the sale of Northam’s stake, Impala now has a clear path to achieving 100% ownership of RBPlat. Their cash-and-shares offer remains open to any remaining investors.
RBPlat owns shallow and mechanized mines, which both Northam and Impala sought to control. These mines are strategically located next to Impala’s own aging and expensive deep-level shafts at the Rustenburg complex. The acquisition of RBPlat will enable Impala to integrate its assets and realize synergies.
Citigroup analysts believe that this deal will remove the investor overhang and further enhance Impala’s ability to maximize the potential of RBPlat. They anticipate that the acquisition will lead to the integration of RBPlat with Impala’s existing assets and the realization of synergies.
For Northam, selling its RBPlat stake could enable the company to pay dividends, implement share buybacks, reduce debt, and strengthen its balance sheet. Although the stake was sold at a loss, RMB Morgan Stanley analysts noted that the price Northam received was attractive due to the decline in platinum metal prices. Northam had originally acquired its RBPlat stake at an average price of 180 rand per share but will now receive 131 rand per share based on Impala’s latest share price.
Analysts also believe that selling the stake will resolve Northam’s balance sheet position and alleviate concerns during the platinum price downturn.
Overall, Impala Platinum’s victory in the battle for control of RBPlat and the subsequent sale of Northam’s stake have significant implications for both companies. Impala can now move forward with its plans for integration and maximizing synergies, while Northam can take steps to strengthen its financial position and benefit from the sale in the long run.