Mineral Deposits concedes defeat against hostile takeover attempt
Takeover target Mineral Deposits is today telling shareholders to take a $345 million cash offer tabled by potential suitor Eramet after its French partner managed to gain more than 50 per cent control.
The junior mineral sands miner (ASX:MDL) originally urged shareholders to reject the hostile takeover bid, but says now Eramet is the company’s single largest shareholder and is in a position of control.
Eramet originally launched a bid in late April of $1.46 per share, which valued Mineral Deposits at about $288 million, because it wanted to gain full control of a 50-50 mineral sands joint venture called “TiZir” in Senegal and Norway.
Mineral Deposits chairman Nic Lamb said in May that “Eramet’s opportunistic, unsolicited and conditional offer comes at a time when the TiZir joint venture is operating at or near record highs and is expected to deliver ongoing strong, sustainable operating performance”.
Since the takeover offer was announced, Mineral Deposits shares have climbed as much as 59 per cent to a 52-week peak of $1.84 in May.
It is now trading at $1.75, giving it a market cap matching the higher offer.
Eramet increased its offer to $1.75 per share in June, but Mineral Deposits still urged shareholders to reject the offer because it was below the $2.04 to $2.52 per share recommended by an independent expert.
However, the suitor now controls 52.6 per cent of Mineral Deposits. Its offer was declared unconditional last week, and no other competing takeover bids emerged.
Given the developments, Mineral Deposits’ directors have recommended shareholders accept the offer and said each director would be doing the same.
Eramet plans to have Mineral Deposits delisted from the ASX.
Stockhead is seeking comment.