Dunne says Northam proves doubters wrong ahead of possible bidding war for RBPlat

Paul Dunne, CEO Northam Platinum

PAUL Dunne, CEO of Northam Platinum said his company had proved the doubters who said it didn’t have the financial firepower to make a bid for control of Royal Bafokeng Platinum (RBPlat).

“So, the R10bn cash portion of the offer is there. Our competition has been saying we cannot afford it, but there you go, the R10bn is in the bank and has been confirmed independently by the TRP (Takeover Regulation Panel),” said Dunne in an interview with Business Times.

On November 9, Northam unveiled a voluntary R172.70 per RBPlat share offer worth about R32.5bn. The offer consists of cash and shares but with the cash element of the offer ratcheting up the lower the acceptance. Northam owns 34.52% of RBPlat while Impala Platinum (Implats), which has also bid for the firm, owns around 41%.

There is now the possibility of a bidding war breaking out for RBPlat. Shares in the company have gained nearly 10% in the last five trading days. It is currently at R163,54/share.

“You would know that our colleagues at Impala also desire the asset [RBPlat] and they are sitting on just under 41%. They may or may not be prepared to sell to us, but we cannot second-guess them,” Dunne told Business Times.

Implats said it wasn’t surprised Northam had made its bid for RBPlat, which came a year to the date after it surprised Implats by taking its initial beachhead stake in the company. Implats had previously announced its intention to buy RBPlat so Northam’s pre-emptive move for RBPlat was viewed as a ‘gazump’.

“We always knew they [Northam] were playing for time with the purpose of getting into a position where they can make an offer, so the offer was not a surprise. The offer is to all shareholders, including us,” said Johan Theron, spokesman for Implats.

“We now have to take stock and look at all of our options and make sure we do everything we can to advance the interest of our shareholders,” he said.

“I think we have multiple options, and we have to work through those options and come up with what is best [for our shareholders],” he said, adding the company could elect to hold or sell its shares to Northam.

“We can sell our shares into the Northam offer, just as they can sell their shares to us. We can also decide to increase our offer price if we think that will offer value at a higher offer price,” he said.

“If we think we can generate returns at a higher offer price and it is likely we can be successful to get control of the whole company, then we can contemplate increasing our offer. There are really a couple of options to think about carefully,” he said.