THE Public Investment Corporation’s (PIC’s) decision not to sell its 10% stake in Royal Bafokeng Platinum (RBPlat) was intended to forestall a bidding war for the company which the Government-owned asset manager considered “value destructive”.
“The PIC wants to be the adult in the room,” said Johan Theron, spokesman for Impala Platinum (Implats). “It is a major shareholder in Implats and in Northam [Platinum Holdings] and doesn’t want either party to overpay.”
The PIC is the largest shareholder in all three companies. It recently increased its stake in Implats to just over 20%, and it has a 17.15% stake in Northam, according to the firm’s recently published annual report.
Implats owns just over 41% stake in RBPlat in terms of a cash and shares offer for the company worth R150 per RBPlat share.
The PIC’s decision on RBPlat was communicated to Implats “around six weeks ago”, said Theron, who added that he did not view it as the asset manager’s final position. “The PIC can kick for touch and take its time. This is its latest position; it is not yet ready to make a decision.”
This means that when Northam Platinum Holdings announced on November 8 its intention to offer R180 per RBPlat share in cash and shares it was already aware of the PIC’s current position. Paul Dunne, CEO of Northam, told Miningmx last week that he hoped to conclude his company’s proposed bid for RBPlat by the first quarter of next year.
The PIC has been asked to further explain its rationale for a statement today in which it said that “… after considering both financial returns for its clients and societal impact of the proposed transaction involving Royal Bafokeng Platinum (RBP) [it] has decided to hold on its position in RBP”.
Northam Platinum was also approached for comment.
The disclosure of the PIC’s position, first reported by Bloomberg News today, comes at the Competition Tribunal approved the proposed “merger” of Implats with RBPlat. The combination of the parties was subject to a tribunal appeal process brought by Northam which argued against the anti-competitive nature of its downsteam consequences.
In fulfilment of the proposed merger, Implats had applied to the Takeovers Regulation Panel for a certificate of compliance. It has also extended its offer to shareholders for a fifth time to December 31. It has previously set a long-step date for closure of the offer for November 22.