South Africa's No.3 gold producer by value, Sibanye Gold, has offered $294 million to buy Aquarius Platinum, in its latest thrust into the platinum sector which has been hammered by falling prices and rising costs.
Under the deal announced on Tuesday, Sibanye offered 19.5 US cents, or 2.66 rand, per Aquarius share, a 56 percent and 60.3 percent premium to Monday closing prices in Johannesburg and London respectively. The offer values Aquarius at $294 million.
By 0808 GMT, Aquarius' shares in Johannesburg soared 41.18 percent to 2.40 rand, slightly below the offer price. The stock was up more than 43 percent in London. Shares in Sibanye advanced 5.5 percent to 18.92 rand.
The offer has the backing of Aquarius' board but requires its shareholders approval.
"The Aquarius board has resolved unanimously to recommend that Aquarius shareholders vote in favour of the transaction," Aquarius said in a statement.
Sibanye is capitalising on the platinum sector shake-up following an unprecedented five-month strike last year and weakening platinum prices that have hit profitability and raised costs in much of the industry.
Sibanye, a spin-off of South African gold producer Gold Fields in September bought the labour-intensive and costly Rustenburg operations of Anglo American Platinum, which were at the epicentre of the strike last year.
Aquarius' mines, which are located in South Africa and Zimbabwe, by contrast, are mechanised and low cost, which Sibanye said would help to consolidate its position in South Africa's platinum sector.
The deal, which is also subject to regulatory approval, is expected to be concluded in the first quarter of next year, Sibanye said.
HSBC, which was the financial advisor to Sibanye, agreed to arrange a $300 million acquisition funding package.