Northam Holdings has announced that it will acquire 93 930 378 RBPlat Shares from Royal Bafokeng Investment Holdings, amounting to 32.8% of the Royal Bafokeng Platinum (RBPlat) Net Shares, for an aggregate purchase consideration of c. R17.0 billion. The purchase consideration will be settled through a combination of the issue of ordinary shares in the share capital of Northam Holdings and cash.
The Parties have entered into a put and call option arrangement (RBIH Put and Call) in terms of Northam may acquire a further 0.5% of the RBPlat Net Shares for a purchase consideration of R135.00 per RBPlat Share. Should the RBIH Put and Call Option be exercised in full, Northam will acquire 33.3% of the RBPlat Net Shares in aggregate.
In addition to the Transaction, Royal Bafokeng Holdings will endeavour to procure that, inter alia, Emikaway (RF), a wholly owned subsidiary of RBH, (i) enters into a put and call option arrangement with Northam in terms of which Northam may acquire an additional 1.6% of the RBPlat Net Shares; and (ii) grants Northam a right of first refusal over a further 1.2% of the RBPlat Net Shares, representing the remaining RBPlat Shares held by the RBH group.
The EMI Put and Call will enable Northam to increase its total holding of the RBPlat Net Shares up to 34.9% in aggregate (i.e. the Acquisition Shares and RBPlat Shares acquired pursuant to the exercise, in full, of the RBIH Put and Call and the EMI Put and Call, excluding any RBPlat Shares acquired pursuant to the right of first refusal).
RATIONALE FOR THE TRANSACTION
The Transaction is aligned with Northam’s operational diversification strategy and will result in Northam acquiring a significant and strategically beneficial interest in RBPlat, providing direct exposure to RBPlat’s proven mining operations and well-understood shallow ore bodies, of which a significant portion is mechanised.
The Transaction will also introduce further diversification to Northam’s metal mix interests, given RBPlat’s higher relative platinum contribution.
In addition, the Transaction will provide a strategic platform for Northam to pursue a possible combination of Northam and RBPlat’s business operations in the medium-term, should Northam wish to pursue such an opportunity.
Northam is of the view that there is a compelling and complementary synergistic fit between the business operations of Northam and RBPlat and that a potential combination of the business operations will create and unlock significant value for shareholders of both companies.