Royal Bafokeng Holdings accepted Northam bid without consulting RBPlat, says CFO

Hanré Rossouw, CFO, Royal Bafokeng Platinum

ROYAL Bafokeng Holdings (RBH) elected to accept Northam Platinum’s R17bn bid for its 32.8% stake in Royal Bafokeng Platinum (RBPlat) without consulting the platinum group metal producer.

“This came out of left field. We were surprised,” Hanré Rossouw, CFO of RBPlat said on 702’s The Money Show on Tuesday evening.

Rossouw added there was “a more rational fit” between his firm’s assets and those of Impala Platinum (Implats) which had last month announced it was in discussions with RBPlat over a 100% buyout.

Implats’ Rustenburg shafts neighbour RBPlats’ recently commissioned project Styldrift. In contrast Northam’s Zondereinde and Booysendal mines are situated far north and east of RBPlat’s mines.

Northam has an option to build its stake in RBPlat to 34.9% but it’s unclear whether it will make an offer to minority shareholders. “We would like to engage with Northam to see what the plan is,” said Rossouw.

“We are not clear on their intentions for minorities,” said Rossouw adding that RBPlat was still evaluating the Implats option even though RBH said it wouldn’t support it.

Northam said earlier on Tuesday it had offered RBH some R180.50 per RBPlat share – an enormous 50% premium to the current share price – which would be settled with cash and shares.

Paul Dunne said that RBPlat’s platinum dominant orebodies complimented Northam’s basket of PGMs. “The RBPlat assets are young, shallow and well capitalised and occupy a strategically important position in the Western Bushveld,” he said.

However, the market reaction was negative. Shares in Northam fell just under 15%.

“It came as a surprise,” said Johan Theron, spokesman for Implats. “We had done a reciprocal due diligence as the deal involved equity and cash. On this basis, we had the full support of RBPlat’s management as they recognised the value of the transaction,” he said.

Northam’s offer comprised a 100% premium to RBPlat’s shares prior to Implats’ offer, said Theron.


  1. There is an interesting corporate governance issue here. Northam has offered cash, shares and other inducements to RBH – through all the projects and partnerships it has offered to the Bafokeng community, who are the owners of RBH. If Northam was to make an offer to minorities it would have to offer a price equivalent to the value of the shares, cash and all other benefits used to induce RBH to accept the offer. Either this or shareholders are not being treated equally – a fundamental tenet of minority protections in a takeover.

  2. Obviously they would offer the same or more to minorities, if they trigger an offer. My guess is it will be a waiting game on a long term strategy. Paul nd team are no fools, they know what they have bought! Bloody clever if you ask me!

  3. An examination of the board and senior management of Northam is an interesting exercise in the context of Implats. Is it an indication of what may be part of the motivation for this move on Royal Bafokeng Platinum? For the sake of Northam’s shareholders we must really hope not. Northam’s track record under the current management regime certainly suggests such a Machiavellian motivation to be unlikely.

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