Sibanye Gold and Aquarius Platinum have entered into an agreement under which a wholly owned subsidiary of Sibanye will, subject to the satisfaction of certain conditions, acquire all of the shares in Aquarius for a cash consideration of US$0.195 for each Aquarius share.
Subject to the transaction completing, Aquarius shareholders will receive $0.195 (or R2.66 per share) at the closing prices and spot exchange rates on 5 October for each Aquarius share held, representing a premium of:
- 60.3% to Aquarius’ closing share price of GBP0.08 on 5 October 2015, the trading day prior to this announcement; and
- 71.4% to Aquarius’ volume-weighted average share price of GBP0.07 over the last 30 days up to and including 5 October 2015.
The Aquarius board has resolved unanimously to recommend that Aquarius shareholders vote in favour of the transaction. Subject to these same qualifications, each director of Aquarius intends to vote all Aquarius shares held or controlled by them in favour of the transaction at the Aquarius shareholder meeting.
Implementation of the transaction
Aquarius will appoint an independent expert to determine whether the transaction is fair and reasonable and in the best interests of Aquarius shareholders.
The independent expert will not be an existing financial adviser of Aquarius. Their report will be included in the notice of shareholder meeting, which is expected to be distributed to Aquarius shareholders in or around November 2015.
In addition to Sibanye’s existing credit facilities the company has entered into an acquisition facility agreement with HSBC Bank as sole arranger for the purpose of providing funding, if required for the transaction.
It is subject to a number of conditions precedent, including all necessary regulatory approvals being obtained, including approval from the South African and Zimbabwean Competition Authorities and the South African Reserve Bank.
Commentary and rationale
Commenting on the transaction, Sir Nigel Rudd, Chairman of Aquarius, says: “The board of Aquarius has carefully considered the proposal received from Sibanye, taking into account all relevant company and macro considerations.”
“The board also took advice from its advisors and engaged with a select number of significant shareholders in the company regarding the proposal and, having taken their feedback into account, have unanimously recommended the proposal subject to an independent expert determining that the proposal is fair and reasonable and in the best interests of Aquarius’ shareholders and subject to no superior proposal emerging.”
Commenting on the transaction, Neal Froneman, CEO of Sibanye, says: “The transaction is an important strategic step for Sibanye which we are confident will result in the realisation of substantial value for stakeholders. Simultaneously Aquarius shareholders realise an attractive cash premium for their current equity holdings.”
For Sibanye the transaction has a strong strategic and financial rationale, both as a stand-alone transaction, but also when considered in conjunction with the recently announced acquisition of the Rustenburg PGM operations. Aquarius’ well managed, low cost, mechanised operations will enhance Sibanye’s asset portfolio and value.
Importantly though, significant additional value can be realised by optimising inherent regional and operational synergies between Aquarius’ Kroondal mine and the adjacent Rustenburg Operations, which Sibanye is in the process of acquiring from Anglo American Platinum.
The transaction is expected to be implemented during the first quarter of 2016. Upon implementation the shares in Aquarius will be delisted from the London Stock Exchange, the Australian Stock Exchange and the JSE in South Africa.