[miningmx.com] – SIBANYE Gold has moved to consolidate its incursion into South Africa’s platinum sector offering $294m (R4bn) for Aquarius Platinum – an offer that has the unanimous support of the Aquarius board.
On September 9, Sibanye put long-standing speculation to bed that it intended to invest in the platinum industry unveiling a R4.5bn offer for the Rustenburg assets of Anglo American Platinum (Amplats), a transaction that still has to be completed.
Including the bid for Aquarius Platinum, Sibanye will now have some 1.15 million ounces of platinum group metals (4E) under its belt, effectively transforming the group into a gold and platinum producer in near equal measure.
“The acquisition of Aquarius is consistent with Sibanye’s strategy to secure value accretive, cash flow enhancing opportunities, which support its dividend strategy,” said Neal Froneman, CEO of Sibanye Gold, in a statement.
He added that the Aquarius transaction would create synergies with assets the group was acquiring from Amplats as well as provide an entry point into Zimbabwe as Aquarius has a 50% stake in the 110,000 oz/year Mimosa operation.
In terms of the offer, Sibanye has proposed buying all outstanding shares in Aquarius for about R2,66 per share, equal to a 62% premium to Aquarius’ volume-weighted average share price of R1.64 over the last 30 days and a 56% premium to Aquarius’ closing share price of R1.70 on October 5.
Sibanye has also agreed a $300m bridging facility with HSBC for the transaction, if required. “We may partially draw down on that,” said Froneman, who told Miningmx earlier this year he would be comfortable with net debt of R10bn to fund the group’s growth ambitions.
The transaction does not require the support of Sibanye shareholders, the company said. A 50% plus one majority will be enough among Aquarius shareholders for the deal to be approved.
Aquarius posted attributable production of 349,426 oz of 4E PGMs (including 193,422 oz of platinum) for its financial year ending 30 June 2015, produced from the Kroondal and Mimosa mines and a retreatment facility, Platinum Mile.
The transaction to buy Aquarius, however, will not bring its Everest asset as Northam Platinum completed the purchase of that asset from Aquarius on October 1 for R450m.
Aquarius Platinum said in its statement that documents related to the transaction, including notice of the shareholder meeting and independent report, would be distributed to shareholders in November.
“The board of Aquarius has carefully considered the proposal received from Sibanye, taking into account all relevant company and macro considerations,” said Nigel Rudd, chairman of Aquarius.
He added that the proposal was “… fair and reasonable and in the best interests of Aquarius’ shareholders and subject to no superior proposal emerging”.
