In a notice to the Johannesburg Stock Exchange, Northam Platinum said it signed an agreement with two holding companies of Royal Bafokeng Platinum (RBPlat) on Monday to acquire the stake for 17 billion rand ($1.13 billion).
Record high platinum, palladium and rhodium prices since last year have left all major PGM players flush with cash and with minimal debt. This has opened up opportunities for consolidation in South Africa, the world's biggest PGM producer.
Last month, South Africa's Impala Platinum and RBPlat had issued a joint statement saying they had engaged in talks over a possible deal. But the main holding company and the single largest shareholder of RBPlat - Royal Bafokeng Holdings Limited - said on Tuesday it no longer supported the transaction.
Shares of Northam Platinum tumbled almost 13% and RBPlats' dropped by more than 5% at 0900 GMT with some fund managers saying the Northam deal was skewed in favour of large RBPlats shareholders, leaving minorities in the lurch.
"Northam effectively snookered Impala," said Roy Topol, portfolio manager at Cratos Capital.
Northam Platinum's 180.50 rand per share offer price for the 32.8% stake in RBPlats values the mid-tier PGM producer at more than 50% higher than its current market value.
Northam said under its agreement, it might also acquire an additional 0.5% first and another 1.6% later, provided some conditions agreed between the parties are met.
This could effectively take its shareholding in RBPlats to 34.9%, just shy of the 35% mark that makes it mandatory to buy out minority investors, according to local market rules.
"They (Northam) don't need to offer anything to minorities since they own less than 35%. But they own enough shares that no one else will be able to take out minorities," Topol said.
($1 = 15.0529 rand)
(Reporting by Promit Mukherjee, Editing by Louise Heavens and Emelia Sithole-Matarise)
By Promit Mukherjee
