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Mvela surges after Northam offer

Feb 08 2011 13:48 I-Net Bridge & Reuters

Company Data

Northam Platinum Ltd [JSE : NHM]

Last traded R26.10
Change R0.10
% Change 0.38%
Cumulative volume 2.71m
Market cap R9.98bn

Last Updated: 25/05/2012 at 19:32. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Share Share line Print
Johannesburg - Shares in Mvelaphanda Resources [JSE:MVL] spiked 6% to its highest level in more than eight months on Tuesday after an offer from Northam Platinum [JSE:NHM] to acquire it.

Mvela's shares surged to an intraday high of R39.97 each from Monday's closing price of R37.70 per share - a level last seen in May last year.

In Tuesday midday trade, its shares were trading at R39 on the JSE - up 3.45% or 130 cents.

Northam, which is a smaller platinum producer, said on Tuesday morning it will buy Mvelaphanda Resources, giving it access to platinum and diamond projects.

The two companies said Northam will offer 20.9 million new shares to Mvela shareholders, valued at R982.8m.

Prior to the acquisition, Mvela will spin off its 50% stake in Northam to its own shareholders. Mvela has been looking to sell down its stakes in other companies to comply with JSE rules on cross-shareholding and delist.

JSE rules bar a listed firm from generating more than half of its earnings from an investment in another listed firm, or having more than three-quarters of its net asset value tied in another listed company.

Under those rules, Mvela would be forced to become a mining operator itself, or delist. The company had previously said it planned to delist, and said on Tuesday it would do so after the Northam deal.

 
 
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