Implats on its offer to purchase remaining RBPlat shares

‘People talk about a bidding war, but it’s hard to imagine a war when there’s only one offer on the table [which is open until June 17]’: Johan Theron, group executive of corporate relations at Impala Platinum.

FIFI PETERS: Platinum miner Impala Platinum today published a circular to shareholders – not only its own – regarding the mandatory offer it is making for the shares of Royal Bafokeng that it doesn’t already own. The company, you’ll remember, was the first to make its play for RBPlats before Northam Platinum entered the race, resulting in some form of bidding war between the two entities.

We have Johan Theron, the group executive of corporate relations at Impala Platinum, joining the market update. Johan, you didn’t seem to get much rest over the festive holidays because it seems like a lot of work was still being done behind the scenes to get the deal across the finish line. Welcome.

JOHAN THERON: Good evening, Fifi.

FIFI PETERS: Just in terms of what has been done at management level regarding the deal, give us an update on what you have been working on.

JOHAN THERON: Yes, Fifi. Obviously we’ve announced our intention to purchase shares in RBPlats and we had wonderful support from institutional shareholders even before our offer opened. So, to open the offer there was a whole bunch of work that we had to conclude in order to post a circular with the regulators. The announcement indeed happened today. That announcement, as you alluded, came out today. So putting all of that together and ticking all the boxes and getting all the approvals for the offer to go open today is indeed something that kept us quite busy over the festive period.

FIFI PETERS: The point I was trying to make is that it doesn’t seem like you had quite a lot of rest over the festive period. But nonetheless, just talk to us about the main elements in the circular issued to shareholders today.

JOHAN THERON: I think the important thing is that we opened the offer already having a 35% shareholding. So that was pretty much the opening of this offer. We’ve had wonderful support from some large institutional shareholders who’ve elected – even before the offer was open on a bilateral basis – to sell into our offer for exactly the same terms the offer was announced at, being R90/share in cash and 0.3 of an Impala share. In fact today, when the offer opened, we were already at a stage where it had become mandatory for the offer to be to all of the shareholders. Obviously now everybody will have the opportunity, if they wish, to transact into this offer from us.

FIFI PETERS: Your current stake is sitting at just over 35%. What is your wish in terms of the response that you’re hoping to get from the market?

JOHAN THERON: The listeners would know that Northam Platinum secured a strategic stake of also around 35% at the end of last year. So with us being at 35% and Northam being at 35% at the present point, and we being the only one with an open offer at this stage, it is our anticipation that it’s a compelling value proposition and that we would find further support, and it’s certainly our intention to grow our shareholding into a controlling position. So ultimately we’d love to get to a position of at least 50%, whereby we would be allowed to consolidate the financials and the production statistics of RBPlats into our group.

FIFI PETERS: How confident are you that you’ll get that 50%?

JOHAN THERON: Well, we are confident. Obviously there’s always risk in these kind of things. The obvious risk is that Northam might come to the market with a follow-on offer, so we don’t discount anything at this stage. But we believe that we’ve done our homework and that what we have is a compelling offer. It obviously makes a lot of sense getting all of the synergies from our side of the fence and, given the support that we’ve received there’s no reason why that shouldn’t be sustained. So we remain very confident that we’ll get to the 50% level.

FIFI PETERS: That was my next question. Just given that Northam has been rather quiet, the silence has been quite deafening, and [there’s] the risk of some shareholders holding out for that higher price that Northam may or may not offer. In that scenario, what’s the next move from you?

JOHAN THERON: I think we’ve been clear to the market that we have no intention of entering into a bidding war. We have very clear thoughts in terms of value proposition and how values tax everybody. We’ve already achieved the 35% level which we thought would be strategically significant. So we are happy to see how this plays out.

Given where we are and what we’ve achieved, we are very satisfied with our current position – but look forward to obviously growing it further.

FIFI PETERS: A last question on Northam at this stage. Have there been any discussions between yourselves and them over this festive period, or perhaps early on in the new year?

JOHAN THERON: We are obviously peers in a very small industry, so there are ongoing engagements with all of our peer companies across the whole front with respect to this transaction – how it pans out and how we work together in the future. We haven’t had the opportunity to sit around the table as joint shareholders in this company yet, but I’m sure that will follow quite soon.

FIFI PETERS: Just a last question. It is still the start of the year and perhaps it’s based on this transaction or even factors outside of it, [but] as a company what are you looking forward to the most in 2022?

JOHAN THERON: Obviously the whole world, the PGM [platinum group metals] industry, has been through turbulent waters with Covid, electricity and all of those impacts. I think the most significant thing that we deal with in our sector is the threat of electrification and battery cars in the medium term. That’s a worry and something that we are doing a lot of work on. But equally we have the prospect of an emerging hydrogen economy and the role that platinum, for instance, can play in that. We’re doing a lot of work to bring that forward, so to speak, so that we can mitigate some of those potential risks.

So we are hopeful that we are past the worst of Covid, that car manufacturers are able overseas to get manufacturing going again, and that we see car sales globally return to a more normalised level in this year, which would be good for all of the metals that we produce. Long may that continue.

FIFI PETERS: Johan, how long do shareholders have to take up the offer again?

JOHAN THERON: The offer is open until June 17, and obviously we can execute. It’s the only offer on the table right now. People talk about a bidding war, but it’s hard to imagine a war when there’s only one offer on the table. So it is open and it’s open for the next couple of months until June 17. The only precedent out there is that we are also working on a Competition Commission process to take control, which is that – at effectively about 40% – we would have to get that permission, which we anticipate will happen. But obviously we require time to go through that process.

FIFI PETERS: Okay, thanks for that intel. We’ll leave it there – until further notice, of course. Johan Theron is the group executive of corporate relations at Impala Platinum.

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