Iluka Resources looks set to snare Irish company Kenmare Resources after proposing a scrip takeover offer valued at $363 million.
In a statement issued after the market closed last night, the David Robb-led mineral sands miner said it has offered 0.016 new Iluka shares for every Kenmare share, giving Kenmare shareholders a 9.6 per cent stake of the combined entity.
Dublin-headquartered Kenmare, which has a primary listing on the London Stock Exchange and a secondary listing on the Irish Stock Exchange, mines the titanium minerals ilmenite and rutile, as well as the zirconium silicate mineral, zircon at its Moma located on the north east coast of Mozambique.
The offer price of 13 cents (or 6.8 pence) per share is less than half of what Iluka originally proposed to Kenmare in June last year, which valued the deal at $845 million.
Kenmare’s board rejected the original offer, but the two companies remained in discussions since then.
Kenmare shares spiked to 16 pence a share on June 26 last year when the original proposal was made, but are currently sitting around 3.1 pence.
Iluka’s shares are currently at $8.16 per share, but had fallen well below $6 in December.
They reached a high of $8.90 during April.
The deal is subject to a number of pre-conditions and approvals.
In a statement, Kenmare said after having reviewed the proposal carefully and considering its financial position and prevailing market conditions, it would be in its shareholder’s best interests to continue to work with Iluka towards satisfaction of the proposal’s conditions.