Mercantile fails to get shareholders on side in takover bid for Bauxite Resources
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Mercantile Investment’s hostile takeover bid for junior explorer Bauxite Resources has ended with an abysmal acceptance rate from shareholders.
Bauxite (ASX:BAU) says Mercantile – the company of legendary Kiwi corporate raider Sir Ron Brierley – gained acceptances from shareholders that own less than 2 million shares, or 1 per cent of Bauxite’s issue capital.
Despite shareholders voting against the proportional takeover bid in April, Bauxite legally had to allow the transfers for the acceptances already submitted.
Mercantile launched an initial bid of 9c per share in November last year and later increased it to 11c per share. The company only wanted a 50 per cent stake.
The predator launched its offer after accusing Bauxite of wasting shareholders’ time and money.
If it was successful, Mercantile was going to immediately pay shareholders 6c a share, terminate a joint venture with HD Mining & Investment, and stop all exploration activities.
The offer has now closed and while the suitor didn’t have much joy with shareholders, it has continued to buy shares on market. Mercantile’s stake now sits at about 18.4 per cent.
Mercantile declined to comment when contacted by Stockhead.
Bauxite has been contacted for comment.