A king wrecks Implats plan to create world’s no. 1 platinum firm

Impala Platinum Holdings Ltd.’s decade-long quest to buy a smaller rival that owns assets key to prolonging the life of its own mines in South Africa came to a shuddering halt on Tuesday.

Chief Executive Officer Nico Muller thought he finally had a deal to acquire 100% of Royal Bafokeng Platinum Ltd., after gaining the backing of the company’s management and board. Implats, as the miner is known, was preparing to make an offer this week after announcing it was in talks on Oct. 27, according to people familiar with the matter.

But a 4.1% gain on Monday in RBPlat, which was until then mirroring Implats’ share moves since the announcement, aroused suspicions that a rival was circling, the people said, asking not to be identified as the details are private.

The company’s fears were realized on Tuesday morning, when Northam Platinum Holdings Ltd. said it was buying a 32.8% stake in RBPlat, potentially blocking Implats’ at least sixth attempt to acquire the company. RBPlat’s biggest shareholder Royal Bafokeng Holdings, the investment arm of the Bafokeng nation that’s led by King Kgosi Leruo Molotlegi and his advisers, switched sides at the last minute to back a bid for its stake from Northam.

While Northam’s 17 billion-rand ($1.1 billion) offer is a 90% premium to where RBPlat was trading when Implats announced talks last month, it excludes minority investors.

“The tragedy of this outcome is that just about everyone is a loser,” said Shane Watkins, chief investment officer for All Weather Capital Ltd., which holds shares in all three companies. “RBPlat minorities are losers because there is now no offer for the minorities. Even the seller, the Royal Bafokeng Holdings might be losers in time because a large part of the consideration is in Northam shares, the price of which are falling quickly.”