Impala Platinum Holdings Limited (JSE:IMP) signed a definitive agreement to acquire North American Palladium Ltd. (TSX:PDL) from Brookfield Business Partners L.P. (NYSE:BBU) and others for approximately CAD 990 million on October 7, 2019. As part of the agreement, Impala Platinum will acquire 100% of the outstanding shares of North American Palladium. Brookfield Business Partners along with its institutional partners hold approximately 81% stake in North American Palladium, in which Brookfield Business Partners itself holds 20% stake. As part of the agreement, Brookfield and its partners will receive CAD 16 per share and other minority shareholders will receive CAD 19.74 per share as consideration. The total offer consideration implies a blended offer per share of CAD 16.77 per share. Impala intends to finance the cash offer by utilizing a combination of existing cash of $288 million (CAD 383.2416 million), proceeds raised from a metal prepayment of excess inventory of $120 million (CAD 159.684 million) and a loan of $350 million (CAD 465.745 million) advanced under a bridge facility agreement to be entered into between Impala and Morgan Stanley Senior Funding, Inc. Once the plan of arrangement is complete, North American Palladium will be delisted and become a wholly owned subsidiary of Impala. The arrangement agreement also includes customary non-solicitation provisions following the expiration of a 30-day modified go-shop period, during which period the North American Palladium and its representatives have the right to respond to bona fide expressions of interest in respect of an acquisition proposal. If North American Palladium accepts a superior proposal during such period, the arrangement agreement provides that a go-shop termination fee of CAD 24.5 million is payable to Impala. If North American Palladium accepts a superior proposal following the 30-day modified go-shop period, the arrangement agreement provides for a termination fee of CAD 37.7 million payable to Impala. Impala has the right to match any superior proposal within 5 business days.

The transaction is subject to regulatory conditions precedent which include merger notification and any subsequent approval by the Canadian and German competition authorities, exchange control approval from the South African Reserve Bank in terms of the Exchange Control Regulations of South Africa, adoption of the plan of arrangement resolution by two thirds of the shareholders of North American Palladium present at a meeting of the shareholders present at a meeting of the shareholders, court approval of the Ontario Superior Court of Justice having been obtained, and other customary closing conditions. As of October 7, 2019, the Board of Directors of North American Palladium and Impala have unanimously approved the transaction. In addition, all directors and officers of North American Palladium and its majority shareholder have entered into voting agreements with Impala to support and vote in favor of the transaction. As of November 1, 2019, the bridge facility was signed with Morgan Stanley Senior Funding, Inc., Nedbank Limited (acting through its London Branch), RMB International (Mauritius) Ltd and The Standard Bank of South Africa Limited (acting through its Isle of Man Branch) and is in place to be drawn down by Impala Platinum Holdings. As of November 26, 2019, regulatory conditions precedent which include merger notification and any subsequent approval by the Canadian and German competition authorities, to the extent required were fulfilled and exchange control approval from the South African Reserve Bank in terms of the Exchange Control Regulations of South Africa was obtained. As of December 9, 2019, North American announced that all of the required regulatory approvals have been obtained with respect to the proposed plan arrangement pursuant to which Impala will acquire all the outstanding shares of North American. The transaction remains conditional on fulfillment of other conditions precedent. The special meeting of North American Palladium shareholders to vote on the plan of arrangement has been scheduled for December 4, 2019. Thereafter, the plan of arrangement will be submitted to the Ontario Superior Court of Justice for approval on December 9, 2019. As of December 4, 2019, North American Palladium announced the positive outcome of the shareholder vote at special meeting from which approximately 96.69% of the Shares voted at the Meeting voted in favour of the special resolution approving the Arrangement.

The transaction is expected to close in late December 2019 or January 2020. As of November 7, 2019, the transaction is expected to close in the fourth quarter of 2019. As of November 26, 2019, the transaction is expected to complete on or about December 13, 2019. The acquisition is expected to be accretive to Impala's net asset value and cash flows with an attractive return and payback period.

Macquarie Advisory and Capital Markets South Africa (Pty) Ltd and Macquarie Capital Markets Canada Ltd. acted as financial advisors respectively to Impala. Morne van der Merwe, Marc Yudaken, Greg McNab, Wildu du Plessis, Haden Henderson, Nick O'Grady, Stephan Spamer, Nancy Hamzo and Peter Clark of Baker McKenzie acted as the legal advisor to Impala. BMO Nesbitt Burns Inc. acted as the financial advisor and fairness opinion provider to the Board of Directors of North American Palladium. Jim Gallagher of Stikeman Elliott LLP and Webber Wentzel acted as legal advisors to North American Palladium. Scotiabank, Inc. acted as financial advisor to North American Palladium Ltd.