Ron Brierley’s Mercantile Investment — which has launched a savage takeover attack on Bauxite Resources — so far only has 3.1 per cent of the explorer’s shares, according to a bidder statement lodged today.

Mercantile wants to buy control of Bauxite (ASX:BAU) with an off-market 9c-a-share cash offer for half of all shares it doesn’t already own.

“Bauxite … has never found anything remotely viable and has chalked up losses of $48 million in the process,” Mercantile told BAU shareholders in the statement.

If all shareholders sold, Mercantile would emerge with a controlling stake of 53.1 per cent.

Mercantile says the offer, made via a subsidiary, is an 11 per cent increase on Bauxite’s 8.1c share price the day it made the offer.

The deal values the company at $19.3 million.

Bauxite has $16.3 million in cash on its books, so Mercantile is effectively valuing the explorer’s three key bauxite and alumina resources, a silica project and two farm properties at $3 million.

“I think they’re valuing them at nothing,” BAU chief executive Sam Middlemas told Stockhead. “We’re actually having some valuations done now.”

Mr Middlemas says all substantial shareholders have backed the board and the company’s current strategy, and an independent expert’s report should be out within three weeks.

If the takeover succeeds, Mercantile will immediately pay shareholders 6c a share, terminate a joint venture with HD Mining & Investment, and stop all exploration activities.

It also plans to sell off all assets, including two farms, and pay the proceeds to shareholders once debts have been cleared.

In a letter to shareholders announcing the surprise bid, Mercantile chairman Sir Ron Brierley accused Bauxite of wasting shareholders’ time and money.

“After 10 years unsuccessfully searching for bauxite, lithium and silica sands, it is time to call a halt,” he said.

“The best use of remaining surplus cash is back in shareholders’ hands.”

Bauxite chairman Rob Nash shot back, saying Sir Brierley’s statement was misleading and pointed to several company milestones they’d hit.

Mercantile is in the business of takeovers, this year taking out listed shell EZA, which had $9 million in cash, and MHM Metals, which had $5.4 million in cash.

Mercantile issued a correction to the market this morning after its bidders statement announcement referred to EZA, rather than Bauxite Resources.