Northam CEO talks up JV with Implats as bitter rivalry for RBPlat nears end-game

Paul Dunne, CEO Northam Platinum

NORTHAM Platinum CEO Paul Dunne today gave further evidence his company would settle for a joint venture in Royal Bafokeng Platinum (RBPlat), adding that the company would not sell into rival Impala Platinum’s offer.

Northam owns 34.53% of RBPlat and has options to extend this 3.27%. It intends to distribute a circular to shareholders on April 28 detailing a planned R172.70 per share offer for RBPlat. This compares to a R150/share offer by Implats which owns approximately 41% of RBPlat.

Asked if he had softened his stance after previously stating a desire to control RBPlat, Dunne said: “This has been portrayed as a boxing match. Personally, we are not fighting each other. I see us fighting over an asset – there’s a slight distinction”.

“We [Northam and Implats] are both South African miners. We have similar cultures. We respect them.”

Implats CEO Nico Muller said earlier this month he doubted a joint venture over RBPlat could thrive. Muller also raised the possibility Implats could sell into Northam’s offer should it materialise, especially if RBPlat ‘s 9.9% shareholder the Public Investment Corporation (PIC) doesn’t take up its R150/share offer.

It is possible Implats could match Northam’s offer when it materialises. For its part, Northam has retained the option of increasing the cash element of its intended offer. However, Dunne declined to say if Northam would engage in a bidding war. “We will deal with that when we see it,” he said. “It’s very dangerous to comment on that.”

Northam said last year when announcing its intention to submit an offer for RBPlat that it reserved the option to increase the cash portion.

As of December 31, Implats had R27bn in net cash of which R15.5bn comprised a guarantee in terms of Takeover Regulation Panel conditions. This was after payment of a R3.6bn interim dividend announced in March. Northam has net debt of R12.3bn.

“Implats is bigger than us in physical size and resources, but our actions and options will not be based on that. We will do best for Northam shareholders and the company. You can be sure of that,” he said.

“We would prefer to control it and that remains.”

The PIC said earlier this year it preferred to hold its RBPlat shares, although Dunne acknowledged the Government owned asset manager could change its attitude. “We have been informed in writing that at this stage, the PIC are not sellers. That could change.”