JOHANNESBURG, Nov 9 (Reuters) – South Africa’s Northam Platinum Holdings said on Tuesday it had agreed to acquire almost a third of mid-tier platinum group metals (PGM) producer Royal Bafokeng Platinum, a move that would help it diversify.

Northam Platinum has signed an agreement with two holding companies of Royal Bafokeng Platinum (RBPlat) on Monday to acquire a 32.8% stake in the company from the holding companies for 17 billion rand ($1.13 billion) at 180.50 rand per share, it said in a statement.

The offer price values the PGM producer at more than 50% higher than its current market value. Shares of RBPlat had closed at 120.52 rand a share on Monday.

Record high platinum, palladium and rhodium prices since last year have left all major PGM players flush with cash and with minimal debt. This has opened up opportunities for consolidation in South Africa, the world’s biggest PGM producer.

Last month, South Africa’s Impala Platinum and RBPlat had issued a joint statement that they had engaged in talks over a possible deal.

But the main holding company and the single largest shareholder of RBPlat – Royal Bafokeng Holdings Limited – said on Tuesday it no longer supported the transaction.

Northam said under its agreement with the RBPlat holding companies it might also acquire an additional 0.5% first and another 1.6% later, provided some conditions agreed between the parties are met.

“The transaction will also introduce further diversification to Northam’s metal mix interests, given RBPlat’s higher relative platinum contribution,” Northam said in the statement.

($1 = 15.0529 rand)

(Reporting by Promit Mukherjee, Editing by Louise Heavens)