The Northam Platinum spat with Impala Platinum's bid to buy out Royal Bafokeng Platinum (RBPlat) ratcheted up a notch as the miner turned to the the Competition Tribunal to intervene on grounds that it is anti-competitive.
Northam's legal counsel said because this was a significant merger and because of the tribunal's powers, the tribunal was the final decision maker on this transaction.
This follows Northam Platinum launching an application to the Competition Tribunal to intervene in the approval process for Implat’s acquisition of its stake.
In November, Northam announced that it had made a strategic investment by acquiring a significant shareholding in RBPlat. It acquired a 34.65 percent, and a bidding war ensued with Implats, which offered to buy out all RBPlat shareholders and, to date, had acquired 37.83 percent of the shares.
The deal had been approved by Competition Commission and Implats and RBPlat had started processes before the tribunal.
The Competition Tribunal heard arguments from both Northam and Implats. In its submission, Northam said that the tribunal should be concerned about the permanent structural change to the relevant markets that this transaction would bring about.
"The tribunal should be concerned when the most promising junior exits the market. The removal of the competitor is the factor the tribunal to consider in the competition test," Northam said.
Northam asked the body to probe into the proposed merger as the wrong market definition was used, and the vertical and horizontal effects of the merger.
Northam also alleges that the merger would be anti-competitive and that smelting capacity might be reduced.
"We submit that it is a competition issue that we are entitled to address in due course when you consider the merits of this transaction. It also means permanent structure changes when RBPlats exit the market in the context where junior miners upstream have very few alternatives.
“The merging party attack on us is essentially about substantiality. They said the merger doesn't lessen the competition. There are two problems with that approach,” Northam said.
However, Implats urged the tribunal not to allow a "busy body" to intervene when their own interest was not at stake. Implats said Northam had no identifiable interest in the merger.
Implats said when Northam's arguments were looked over, they were only theoretical concerns about the impact of the merger on junior miners.
"We submit that that theoretical impact, of the merger on junior miners, is a contrived justification for intervention. The junior miners were consulted by the commission. The commission found that the junior miners had alternative refineries that they can switch to and that they can get good terms else where, as they can at Implats," Implats said.
Implats urged the tribunal to be aware of the motive behind Northam’s application to intervene.
Implats said some of the elements of the appeal showed that Northam was trying to delay the proceedings so that it could submit a takeover bid of its own.
Meanwhile, Northam said it had declared any interest it might have in an opposing bid. It said this was not the motive behind its application to the tribunal.
The tribunal will review both parties’ arguments and give in due course.
BUSINESS REPORT