Northam and Implats duke it out but the JSE shows Implats is ahead on points

The battle for control of Royal Bafokeng Platinum (RBPlat) between Northam Platinum (Northam) and Impala Platinum (Implats) is continuing with both groups increasing their respective shareholdings through off-market purchases.

While this off-market struggle is going on behind the scenes  the trading patterns on the JSE indicate that investors prefer Implats chances as the Implats share price is outperforming that of Northam.

Since the corporate shenanigans started early in November,  Northam has dropped nearly 10% from R248 to R224 at Tuesday’s close while Implats shares have risen nearly 13% from around R198 to R224 over the same period.

Northam announced on December 8 that it had pushed its holding in RBPlat to 34.95% following the acquisition of another 6.3m shares at an average cost of R162,7 a share and a maximum cash consideration of R165 per share.

That level is critical because it is just below the 35% benchmark at which Northam would have to make a full takeover offer to all RBPlat shareholders as Implats intends doing early in January.

Northam also declared it had concluded an option and right of first refusal agreement with RBPlat shareholder EMI which, if exercised, could potentially increased Northam’s shareholding in RBPlat up to 38.27%.

Implats today announced it had acquired another 942,000 RBPlat shares taking its total holding in the company to 32.26%.

The Implats offer is valued at R150 per RBPlat share consisting of R90 in cash and 0.3 Implats shares for one RBPLat share offered.  The group’s aim is get a holding of at least 50% plus 1 share in RBPlat which means it will be able to consolidate the RBPlats operation fully into its own accounts.

While Implats currently holds a lower stake than Northam it effectively can block Northam on any RBPlat vote over which Northam has a conflict of interest. Reason is a 50% vote in favour is required but Northam would not be able to vote its own stock so, assuming a 90% total voting turnout, then Implats can block Northam.

Northam got into this scrap paying R180 a share in cash to Royal Bafokeng Holdings to buy its 32.8% stake in RBPlat.

Implats group executive for corporate affairs Johan Theron commented, “ Northam paid an enormous premium to block us but ours is the only offer on the table at this stage.

“For the next six months if Northam wants to make an offer to RBPlats shareholders then that offer has to be mandatory to all shareholders including Implats; it has to be at R180 a share and it has to have an option to be accepted 100% in cash.”

RBPlats shares have soared from R110 to R150 since the beginning of November with Noah Capital Markets analyst Rene Hochreiter predicting there is more to come stating “we may soon see R170 or R180/share.”