26th Jun 2014 09:45
LONDON (Alliance News) - AIM-listed Kenmare Resources PLC said Thursday it has rejected an approach by mineral sands exploration, project development, operations and marketing company Iluka Resources Ltd for a potential combination of the companies
Following press speculation and confirmation of the approach by Iluka early Thursday, titanium producer Kenmare Resources said it has rejected the proposal as it believes it does not recognise the value in its Moma mine as a long-life low-cost asset.
Kenmare Resources said the proposal received was based on a share for share exchange, with no cash component, with Kenmare shareholders receiving 0.036 new Iluka shares for each Kenmare share they own.
M&G Investment Management, which manages funds owning in aggregate 19.05% of Kenmare, has confirmed that it supports the board's decision.
The approach from Iluka was preliminary in nature and was subject to various pre-conditions, including due diligence, said Kenmare, and there can be no certainty that an offer will ultimately be forthcoming or on the terms on which any offer might be made.
Iluka said it had made an approach to Kenmare in relation to a potential combination, which may be implemented by way of an offer for Kenmare but provided no details of the approach. "Iluka's assessment of a potential transaction involving Kenmare is consistent with Iluka's strategy of assessing various mineral sands opportunities, and exploring transactions where financial merit and strategic rationale may exist," said the exploration company.
Shares in Kenmare Resources were trading 20.50% higher at 14.46 pence per share Thursday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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