9 Nov, 2021
Royal Bafokeng Platinum in deal with Northam as Impala's takeover collapses
By Karl Decena
South Africa-based Royal Bafokeng Platinum Ltd. agreed to a stake sale with Northam Platinum Holdings Ltd. after takeover talks with Impala Platinum Holdings Ltd. fell through.
Northam Platinum agreed to acquire an initial 32.8% stake in Royal Bafokeng Platinum for 17.0 billion South African rand, or 180.50 rand per share, from a subsidiary of top shareholder Royal Bafokeng Holdings Pty. Ltd. The company has options to increase its Royal Bafokeng Platinum shareholding to 36.1%, it said Nov. 9.
The deal followed Impala Platinum's same-day announcement that it would no longer pursue its planned takeover of Royal Bafokeng Platinum because Royal Bafokeng Holdings no longer supported the potential transaction.
Northam Platinum said the Royal Bafokeng Platinum deal will provide a platform to pursue a possible merger between the two companies in the medium term, highlighting synergies between their operations.
Royal Bafokeng Holdings said in a separate, same-day release that Northam's unsolicited offer "maximizes value and responsible, sustainable stewardship for the Royal Bafokeng Nation." The agreement will see Northam get involved in community initiatives, including the development of renewable energy and battery storage projects.
Under the terms of the latest deal, Northam can increase its Royal Bafokeng Platinum stake to 33.3% for 135 rand per share under a call and put option agreement with Royal Bafokeng Holdings. The company can further raise its interest to 34.9% by entering an additional call and put option arrangement with Royal Bafokeng Holdings, which would also grant Northam a right of first refusal on Royal Bafokeng Holdings' remaining 1.2% stake.
Northam will fund the acquisition of the initial Royal Bafokeng Platinum stake by issuing 34,399,725 shares, resulting in Royal Bafokeng Holdings holding an 8.7% stake in Northam. Consideration also comprises a cash component of 8.6 billion rand, payable in three tranches, with the last due by Sept. 30, 2022.