Implats is extending lengthy takeover offer for RBPlat by another month

Impala Platinum (Implats) has extended its already drawn-out takeover offer for Royal Bafokeng Platinum (RBPlat) by another month while it awaits a takeover compliance certificate from the mergers & acquisition (M&A) watchdog.

Implats said on Wednesday it would extend its offer until April 28 pending a ruling from the Takeover Regulation Panel, which has come under criticism for delaying the M&A processes.

Implats has been in hot pursuit of RBPlat for more than a year, along with its smaller rival Northam Platinum. Both miners have argued that RBPlat’s large, shallow and high-quality platinum group metals (PGM) ore bodies fit neatly in their longterm growth strategy.

On Tuesday, Implats acquired additional shares in RBPlat to bring its total shareholding to 41.54%, while Northam owns nearly 35% of the target company, with an option to increase it to 38%. The Public Investment Corporation (PIC) is the potential kingmaker with a shareholding of 9.9%.

CEO Nico Muller has previously voiced frustration at the many delays that Implats faced in its proposed acquisition, but his messaging of securing majority control or walking away has been fairly consistent.

Implats has been eyeing its cross-town rival for more than a decade to extend the life of its own ageing, deep-level operations in Rustenburg. RBPlat said in February that the extended battle is limiting its ability to pursue growth plans, with some personnel opting to leave due to uncertainty, underscoring frustration at the drawn out process.

“The uncertainty caused by the delay in finalising the corporate action is what has become a key risk to managing our people, their morale and retention,” RBPlat CEO Steve Phiri at the time. “We are unable to formulate a long-term strategy and implement aspects of our current strategy, which includes growth. Our capital allocation abilities are constrained.” PGM prices have fallen significantly since the Implats offer was made in January 2022, affecting the share prices of companies concerned.

“Both companies are more focused on long-term PGM prices rather than spot prices and believe it is cheaper to buy PGM assets than to build them. The process has probably taken longer than investors would’ve thought when Implats first announced its offer to acquire RBPlat,” said Saleho Tsatsi, investment analyst at Anchor Capital.

“All parties to the proposed transaction are frustrated by the drawn-out process. This includes the shareholders of RBPlat, Implats and Northam, as well as the executives and staff of the various companies,” said Rowan Williams, a director at Nitrogen Fund Managers.

He said large merger proposals were becoming more caught up in the regulatory process led by the department of trade, industry & competition.

“This is slowing the pace of competition approval and increasing the level of uncertainty as to whether the transaction will proceed,” Williams said, citing the Heineken-Distell deal that took months to finalise as another example.