JSE-listed platinum group metals (PGMs) miner Impala Platinum (Implats) issued an offer circular to shareholders of midtier PGMs miner Royal Bafokeng Platinum (RBPlat) on January 17 proposing to acquire all RBPlat shares it does not already hold.
As at January 7, it held 102.05-million RBPlat shares, representing about 35.31% of the shares in issue.
Implats is offering RBPlat shareholders R90 in cash and 0.3 of an Implats share for every RBPlat share held.
Implats CEO Nico Muller says the proposed acquisition of additional RBPlat shares will provide a structure that offers “compelling strategic, operational and financial benefits for all Implats and RBPlat stakeholders [as] it secures a western limb of the Bushveld Complex’s production base that enhances and entrenches the region’s position as the most significant source of global primary PGMs production.”
He adds that the acquisition will also deliver “tangible” socioeconomic benefits for the region, its communities and South Africa as a whole, including employment security and sustained indirect benefits for the greater Rustenburg region.
In a statement, Implats says the offer provides a “compelling” value proposition for RBPlat shareholders by “crystallising inherent equity value at an attractive premium” through the receipt of a combination of cash and high-quality and liquid scrip in Implats.
This, in turn, offers exposure to a global portfolio of PGM assets, projects and a toll refining business, which Implats says is well-positioned to capture the benefits of the full PGMs value chain through integrated processing facilities, including wholly-owned smelters, as well as base and precious metal refineries.
It also offers an opportunity to benefit from regionally-diverse production growth across shallow, mechanised operations on the eastern limb of the Bushveld Complex, Canada and Zimbabwe and the planned expansion of installed processing capacity.
Implats further adds that the offer avails the “best position” to deliver future operational benefits of significant, unique regional synergies presented by these contiguous operations. This is because of Implats’ comprehensive experience of the orebody and its ability to leverage cost-effective opportunities for future growth, it states.
Further, the offer provides an “attractive and sustainable” dividend yield, underpinned by clear and disciplined capital allocation priorities and a strong and flexible balance sheet.
“Our value-focused strategy is to increase exposure to low-cost, shallow, mechanised assets; enhancing the positioning of the Implats group with a quality portfolio of high-value operations that are sustainable and competitive through the cycle,” says Muller.
He adds that the level of ownership in RBPlats achieved by Implats to date is indicative of the broad support it has received and affirms the strategic rationale and value proposition provided by this acquisition.
The offer will be open for acceptance from 09:00 on January 17 to 12:00 on June 17.
Implats and fellow PGMs miner Northam Platinum have both made a play for RBPlat.
In November last year, RBPlat shareholder Royal Bafokeng Holdings accepted an unsolicited offer for up to a third of RBPlat shares in a R17-billion transaction.
Further, RBPlat in December announced that it had received an unsolicited approach from Northam regarding its interest in acquiring all, or a portion of, the voting securities of RBPlat. At the time, RBPlat said its independent board would deliberate on the approach.