Trade in New Century shares suspended as Sibanye closes in

Australian miner New Century, under a takeover bid by Sibanye, on Wednesday suspended trade in its shares as the mining giant closed in on sealing the deal to acquire the company. 

Sibanye first announced its intention to swoop on the company in February after it put forward a R1.5bn unsolicited offer to buy the 80% of New Century it did not own, saying it is unhappy with the company’s strategic direction.

The miner, which had a 19.9% stake in New Century at the time of the unsolicited offer, has since rapidly increased its holding in the company to 78.3%.

The board of the Aussie company, which initially advised its shareholders to take no action, has since recommended that they accept the Sibanye offer.  

The Australian Securities Exchange (ASX) on Wednesday said New Century had requested that it place a trading halt, pending it making an announcement soon.

“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Friday, 17 March 2023, or when the announcement is released to the market,” said the bourse. 

Sibanye has indicated its intention to delist the company. In a fiery letter to New Century shareholders, Sibanye CEO Neal Froneman drew a line in the sand, and said the company was under poor leadership. 

“We made an investment into New Century in 2021 consistent with our strategy to increase exposure to the circular economy by growing our tailings retreatment and recycling presence globally. Our investment was based on New Century looking to build a leading global tailings retreatment business, uniquely positioned to play a key role in green metal supply chains,” Froneman wrote. 

“We have been concerned about the change in strategic direction of New Century under current management, with the building of a leading global tailings retreatment business no longer a focus.”

Sibanye’s play for New Century comes just months after leadership changes at the Australian miner. Its chair, Kerry Gleeson, took office only in November.  CEO Robert Cooper was appointed six months ago.

Sibanye has warned shareholders who don’t want to sell of the risks of being  minority shareholders.

“Sibanye Australia’s majority holding in New Century shares and its control over New Century may affect the liquidity of minority shareholders’ New Century Shares, noting that New Century has historically been thinly traded. These factors may make it more difficult to sell your New Century shares outside of the offer at current price levels.”

Sibanye has also made public its desire to lay its hands on Zambian copper mining firm Mopani.