06/10/2015 - 23:42

Aquarius backs $410m takeover offer

06/10/2015 - 23:42

Bookmark

Upgrade your subscription to use this feature.

South Africa’s Sibanye Gold is poised to acquire Aquarius Platinum, which has been struggling for several years to deal with weak commodity prices.

Aquarius backs $410m takeover offer

South Africa’s Sibanye Gold is poised to acquire Aquarius Platinum, which has been struggling for several years to deal with weak commodity prices.

The directors of the two companies have entered an implementation agreement for the takeover, which is pitched at US19.5 cents (27.5 cents) cash per share.

Aquarius said the offer represents a 60 per cent premium to the company’s closing share price on 5 October, prior to the announcement, and a 71 per cent premium to its 30-day average.

Its shares traded as low as 12.5 cents last month, compared to 46 cents one year earlier.

Even that price is a far cry from the company’s glory days – it was trading at $3.60 in 2011 before suffering a sharp collapse, and briefly hit more than $9.00 in 2008 before the GFC.

In recent years it focused on cost-cutting and asset sales, as it sought to lift the performance of its platinum group metals (PGM) mining operations in South Africa.

In the year to June 2015, it reported EBITDA from its mining operations of $26 million but a bottom-line loss of $98 million after accounting for one-off items.

Sibanye is hoping to achieve operational synergies between Aquarius’ Kroondal mine and the adjacent Rustenburg mine, which it is in the process of buying from Anglo American Platinum.

Chief executive Neal Froneman aid “the transaction is an important strategic step for Sibanye which we are confident will result in the realisation of substantial value for stakeholders”.

Aquarius chairman Sir Nigel Rudd said the company’s directors have unanimously recommended the proposal subject to an independent expert determining the proposal is fair and reasonable.

The takeover will be implemented by way of a plan of amalgamation under the Companies Act of Bermuda, where Aquarius is registered.

Aquarius originated in Perth, where it maintains its company secretarial function, and is listed on the London, Australian and Johannesburg stock exchanges, while Sibanye is listed on the Johannesburg and New York exchanges.

Aquarius is being advised by Barclays Bank, Absa Bank, Allen & Overy, Linklaters and Conyers Dill & Pearman.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options