ROYAL Bafokeng Holdings (RBH) said yesterday that it had prioritised the socio-economic interests of the Bafokeng nation by rejecting Impala Platinum's (Implats) proposed buyout bid of its platinum assets.
RBH surprised the market yesterday when it scuppered Implats and accepted a R17.2 billion unsolicited cash and shares offer for 32.8 percent stake in Royal Bafokeng Platinum (RBPlat) at R180.50 per share. After the deal was announced, RBPlat's share price slid 7 percent to a low of R111.96 per share, while Northam's shares tumbled nearly 16 percent to R205.10.
Later in the day the shares of RBH closed 2.18 percent lower at R117.89, while Northam shares slid 15.43 percent to close at R205.73 on the JSE yesterday.
RBPlat, owned by the Royal Bafokeng nation in the North West, is a mid-tier platinum group metals (PGM) producer listed on the JSE in November 2010 as the first truly community-led company to do so. Last month Implats made a non-binding indicative proposal to acquire 100percent of the issued ordinary shares of RBPlat without disclosing the value of the transaction.
But RBH yesterday decided to go with the unsolicited offer from Northam, saying the transaction maximised value and responsible, sustainable stewardship for the Royal Bafokeng nation.
RBH chief executive Albertinah Kekana said they had to place the interests of the Royal Bafokeng nation top of mind as a firm entrusted to manage the nation's investment portfolio with a net asset value of R29bn.
Kekana said this transaction both maximised and accelerated their ambitions on maintaining a diverse and liquid portfolio, and yielding long-term returns for the shareholder.
“For the Royal Bafokeng nation and the region as a whole, our transaction with Northam will see a significant benefit in terms of the community development interventions that have been announced today,” Kekana said.
The transaction will see RBH partnering with Northam to deliver secure and affordable energy supply; enterprise and supplier development, including procurement opportunities, for small and medium-sized enterprises (SMEs); and skills development to address youth unemployment through a trade school.
In terms of the agreement, there is an initial sale of RBH's 32.8 percent interest in RBPlat, which can increase to 33.3 percent. The proceeds of the sale will be realised through a combination of a cash consideration of R8.6bn, as well as a share consideration resulting in RBH holding an interest of 8.7 percent in Northam.
At the conclusion of the transaction, RBH will continue to be a longterm PGM investor, through its various holdings, including through the 2.8 percent interest that it will hold in RBPlat directly and will have a further indirect stake through its interest in Northam.
Northam chief executive Paul Dunne said the transaction aligned perfectly with their long-term growth strategy, and the introduction of RBH as a significant shareholder further strengthened other empowerment credentials.
“In particular, we believe the complementary metals mix of RBPlat, with a higher relative platinum contribution, fits well within the broader Northam metals basket,” Dunne said.
BUSINESS REPORT ONLINE