The moguls behind a hostile takeover bid for Bauxite Resources are misrepresenting the company, the board says — and shareholders should sit tight.

Corporate raider Ron Brierley’s Mercantile Investment (ASX:MVT) launched a $19.3 million bid for the company last week.

“After 10 years unsuccessfully searching for bauxite, lithium and silica sands, it is time to call a halt,” Mr Brierley said in a letter to shareholders.

The bid came as a “complete surprise”, Bauxite (ASX:BAU) chief executive Sam Middlemas told Stockhead at the time.

Today the company launched a defence.

“The company considers that the above statement [by Mr Brierley] is misleading,” Bauxite chairman Robert Nash said today.

“It is important to set out some facts about what has been achieved by the company since the listing in 2007.”

Mr Nash pointed out its 227.9 million tonne Felicitas bauxite resource near Perth, and the 40.2 million tonne Fortuna resource, for which it paid $7.5 million and a royalty on the first 100 million tonnes of bauxite mined at a rate of 0.9 per cent of the price paid.

Ron Brierley

A joint venture with Chinese State owned HD Mining, which Mercantile wants to scrap, had established an 87.6 million tonne resource with an average 31.9 per cent grade of alumina.

Bauxite returned $9.3 million in capital to shareholders in 2014, and $10.7 million in 2016.

Mercantile has offered 9c a share for half of the shares on issue, and wants to shut down the company, sell off its assets and return all the cash to shareholders.

“No formal bid documents have been received to date,” Mr Nash said.

Mercantile director Gabriel Radzyminski told Stockhead last week he would reveal Mercantile’s current stake in Bauxite when releasing a bidder’s statement.

Platinum Gate’s Robert Swarbrick says while the off-market offer means Mercantile will get the bauxite assets, which he says are good, for “nothing” but it could be a way for shareholders to exit the business.

The assets have been “sitting there” since 2010 and need investment to turn them into a productive mine, which Bauxite Resources is yet to do, Mr Swarbrick said.

Ventnor Capital’s Morgan Barron says the bauxite market is “hot”.

Bauxite is a naturally-occurring ore from which alumina and aluminium are produced.

Australia is the world’s largest producer of bauxite, with five mines in Western Australia, the Northern Territory and Queensland, according to the federal governments’ department of industry, innovation and science.

In 2014-15 Australia exported 20.2 million tonnes of bauxite worth around $934 million, according to the department.

Aluminium is a major component of electric cars, both in the body and in the casings for batteries.

Alumina prices rose steeply from last year before dipping again this year, hitting $468.34 a tonne on November 9.