(Bloomberg) —
Northam Platinum Holdings Ltd. made an unsolicited approach to buy some or all of Royal Bafokeng Platinum Ltd., signaling a bidding war for the South African platinum miner.
The approach comes after Impala Platinum Holdings Ltd. last month revived its pursuit of Royal Bafokeng, seeking control of the smaller producer known as RBPlat, which is key to prolonging the life of its own deep-level operations. Earlier in November, Northam had swooped to buy out RBPlat’s biggest shareholder, thwarting Implats’ initial approach.
“The Northam unsolicited approach does not contain any details as regards the timing or the commercial and financial terms of a possible offer,” RBPlat said in a statement on Thursday.
RBPlat said it’s considering Northam’s request to perform due diligence on the same basis as that undertaken by Implats. RBPlat said earlier talks with Northam over a possible offer ended after its board rejected a non-binding offer letter dated Oct. 11.
On Nov. 29, Implats offered 150 rand in cash and shares to RBPlat shareholders, valuing the company at about 43.4 billion rand ($2.7 billion). That came after Northam agreed to pay 180 rand a share for a 32.8% stake in RBPlat.
RBPlat climbed 4.2% to 160.53 rand as of 1:20 p.m. in Johannesburg trading. Implats said on Wednesday that it owned 32.26% of RBPlat shares. Northam said on Tuesday that its holding had risen to 34.95%, with options to increase that stake to 38.27%.
Operational Synergies
Implats has long wanted to own RBPlat’s low-cost mechanized assets, which are adjacent to its own operations in the Rustenburg mining complex. The mining synergies with Northam are less compelling.
“The risk is that Northam overpays given their lack of mining synergies with the Royal Bafokeng assets,” said Shane Watkins, chief investment officer at All Weather Capital Ltd. “Their mines are not adjacent to each other.”
Northam spokesman Leon Van Schalkwyk didn’t respond to calls seeking comment.
Northam’s audacious bid for the stake owned by Royal Bafokeng Holdings — the investment arm of the Bafokeng nation that’s led by King Kgosi Leruo Molotlegi and his advisers — reflected the growth ambitions of Chief Executive Officer Paul Dunne.
(Updates with due diligence request in fourth paragraph)
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