IMPALA Platinum (Implats) has signed a framework agreement with the Department of Trade and Industry that locks in “public interest benefits” as a result of its proposed offer for Royal Bafokeng Platinum (RBPlat) provided it owns 50% plus a share.
Implats currently owns 37,93% of RBPlat having scooped up the support of several institutions such as Allan Gray, Coronation and Ninety One which held substantial stakes in RBPlat. However, the kingmaker is the government-owned Public Investment Corporation (PIC) which has just over 9% in RBPlat but has not indicated if it will accept Implats’ offer.
Implats CEO Nico Muller told Miningmx in June that he was disappointed the PIC had not made a decision. “We understand and respect the governance that the PIC applies. It has taken rightful opportunity to consult with all stakeholders,” Muller said in an interview on June 3. “The PIC is a material shareholder in the company, but it is unclear and it is disappointing that it is taking this long,” he said.
The benefits include support for small and medium sized businesses and procurement localisation. “The successful conclusion of this Framework Agreement is a further positive endorsement by key stakeholders of the proposed transaction and the significant public interest benefits that are expected to flow from it,” said Implats today.
Implats also announced that it would not adjust the cash element of its takeover offer for RBPlat despite receiving a dividend from the company. Earlier this month, RBPlat announced an interim dividend of R711m, equal to 245 cents a share – a year-on-year reduction of just over 54%.
Implats will therefore continue to offer R90 per RBPlat share as well as 0.3 Implats shares per RBPlat share.
The framework agreement comes as the Competition Tribunal studies an objection to Implats’ proposed offer for RBPlat by Northam Platinum. Northam bought just under 35% of RBPlat in November and has options taking its stake to about 38% – large enough to frustrate Implats takeover offer.
The Competition Commission earlier recommended to the Competition Tribunal that Implats’ offer be supported. But Northam contends that if RBPlat were to be taken over it will prejudice smaller miners in the platinum group metals (PGM) industry in South Africa.
Northam said that Implats’ current capacity to process PGM concentrate for smaller miners – conducted through its Impala Refining Services (IRS) – will be absorbed by concentrate from RBPlat if the takeover is approved. As such it will fail competition regulations.