Royal Bafokeng Platinum rockets almost 20% on proposed Implats buyout offer

The share price of Royal Bafokeng Platinum (RBPlat) rocketed almost 20% in early morning trade on Wednesday after it announced jointly with Impala Platinum (Implats)  that talks are underway for Implats to buy it out.

RBPlat was trading at around R113 a share, while Implats was almost 3% weaker at R205.50 following the news. If successful, the proposed deal will see RBPlat becoming yet another company to delist from the JSE.

“Shareholders of both RBPlat and Implats are advised that the parties are in discussions relating to a non-binding indicative proposal from Implats to acquire 100% of the issued ordinary shares of RBPlat, other than treasury shares held by the RBPlat Group by way of a scheme of arrangement in terms of Section 114 of the Companies Act, 71 of 2008,” the group’s noted in a Sens statement.

Implats is a major platinum metals group with a market cap of around R172 billion, while RBPlat is a much smaller JSE-listed peer with its market cap valued at around R27 billion.

However, RBPlat is burgeoning as a mining company, having recently joined the elite group of SA’s top 10 mining groups according to the PwC SA Mine 2021 report.

Read: AngloGold Ashanti bumped off list of Top 10 mining companies

“Should Implats acquire all the issued ordinary shares in RBPlat, application will be made to the JSE for the issued ordinary shares of RBPlat to be delisted. The parties have completed a reciprocal due diligence exercise and are progressing a Proposed Transaction implementation agreement,” the groups said in a relatively short announcement.

The groups gave no indication of an offer price or how the deal will be structured, as the proposed transaction is under discussion or at a non-binding stage.

“Shareholders will be kept informed of developments in this regard,” RBPlat and Implats noted in the joint statement.

“The proposal, which contains terms and conditions customary for a transaction of this nature, does not constitute an offer or a firm intention to make an offer as contemplated by regulation 101 of the Companies Regulations, 2011,” the groups further pointed out.

“Accordingly, shareholders are advised to exercise caution when dealing in their RBPlat and/or Implats shares until a further announcement is made,” the Sens statement added.