30th Apr 2015 08:48
LONDON (Alliance News) - Kenmare Resources PLC shares were trading higher on Thursday after the company received a non-binding takeover offer from Australia's Iluka Resources Ltd.
Iluka has made a proposal for an all-share merger between the two at a ratio of 0.016 Iluka shares for each Kenmare share, making the offer worth about GBP190 million, almost double Kenmare's market capitalisation. Kenmare said its board has given its backing to the takeover offer.
The news sent shares in Kenmare up 21% to 3.74 pence, the best performer in the FTSE All-Share.
The deal will be conditional on securing approval from authorities in Mozambique, where Kenmare operates the Moma Mine, and on guarantees to be made on Kenmare's debt repayments.
Kenmare, in a separate statement, published its production results for the first quarter of 2015, with production of heavy mineral concentrate falling 50% and ilmenite production down 39% but primary zircon production up 19% in the quarter.
Ore mined was down by 57% in the quarter, when the company's operations were hit by grid power outage in Mozambique caused by flooding in the country.
By Sam Unsted; [email protected]; @SamUAtAlliance
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