Sibanye Gold makes £200mln offer for Aquarius Platinum

Sibanye will offer 2.66 rand (about 20 cents) per share for Aquarius, and Aquarius’s board has urged shareholders to vote in support of the offer, Bloomberg reports.

Sibanye Gold Ltd. said it has made a recommended cash offer for Aquarius Platinum Ltd. worth about $294 million. There likely to be a number of takeovers in platinum mining in South Africa as the battered industry tries to consolidate and survive after two years of strikes and falling prices.

It also cited its recent agreement with Anglo American Platinum concerning the Rustenburg platinum group metals operations. Aquarius Platinum shares rose as high as R2.48, the most in more than seven months, and traded 34% higher at R2.28 as of 2:24pm in Johannesburg.

The stock was up 37 percent in London. Shares in Sibanye advanced 5.5 percent to 18.92 rand.

“In addition, the transaction provides an entry point into Zimbabwe, which hosts the second-largest platinum reserves in the world and represents significant low-priced optionality”, said Sibanye.

“Everybody is saying prices can not stay this low forever”.

Sibanye said the transaction has a strong strategic and financial rationale.

Sibanye Chief Executive Neal Froneman told a presentation in Johannesburg that the company had no intention of buying the assets of its rival Harmony Gold.

Aquarius’s main asset, the Kroondal joint venture with Anglo in South Africa, is near the previously bought assets.

Sibanye’s gold assets are older mines that generate good cash flow even at current prices and due to their age do not need huge investments, freeing money for shareholders.

The deal, for which negotiations opened at the end of 2013, is being financed with the help of a $300 million loan from HSBC.