UPDATE 2-South Africa`s RB Platinum says expert to evaluate Northam bid

Published: 2022-11-09 tag: commodities

(Reuters) -South Africa’s Royal Bafokeng Platinum said on Wednesday that an independent board will appoint an expert to evaluate Northam Platinum’s takeover bid, which rivals an offer by Impala Platinum.

The expert’s opinion on the counterbid will be included in the RBPlat’s response to Northam, due to be published on Dec.7.

“The independent board does not express any view or recommendation on the merits of the offer at this stage,” RBPlat said in a statement.

Northam made its bid formal on Wednesday, escalating a takeover battle with bigger rival Impala Platinum, with an offer to acquire all RBPlat shares in issue for a consideration representing 172.70 rand ($9.72) per share.

Northam’s offer could be all cash or a combination of cash and shares, while Impala’s offer is a split of 90 rand cash and 0.3 Impala shares.

If Impala Platinum does not accept the offer for its stake in RBPlat, Northam said it would pay 152.42 rand in cash and the remaining 20.28 rand in shares.

Impala Platinum told Reuters it was reviewing Northam’s announcement.

Northam’s shares closed 6% down on Wednesday, weighed by investor concerns over dilution.

“The Northam share price fell due to the potential equity dilution as they would have to issue a large amount of shares to fund the acquisition,” Roy Topol, portfolio manager at Cratos Capital, said.

Impala’s plans to buy RBPlat, announced last November, were immediately followed by Northam’s acquisition of a 33% stake in the miner, triggering a bidding war that has gone on for months.

Both Northam, which currently owns 34.52% of RBPlat, and Impala, the biggest shareholder with 40.71%, covet RBPlat’s large, shallow, high-quality assets.

Impala is one of the world’s top five platinum producers, with 2.27 million ounce platinum group metal production in 12 months to June 30 2022.

Northam is seeking to add RBPlat’s output to its 716,488 ounce 2021 production as part of its strategy to scale the 1 million ounce threshold. RBPlat produced 467,000 ounces in 2021.

($1 = 17.7671 rand)

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