Ron Brierley’s Mercantile gains momentum in play for Bauxite Resources
Sir Ron Brierley’s Mercantile Investment is gaining traction in its fight to take control of Bauxite Resources.
The legendary corporate raider’s investment company (ASX:MVT) has more than doubled its stake to 10.3 per cent less than a week after tabling an increased cash bid of 11c per share.
An independent expert report concluded in December that the original off-market offer of 9c per share, which valued the company at $19.8 million, was “neither fair nor reasonable”.
The expert valued Bauxite (ASX:BAU) at 11c to 13.3c, with a sweet spot of 12.1c.
Consequently, the board urged shareholders to reject Mercantile’s bid. Bauxite offered shareholders $10.7 million if they remained loyal.
Shareholders are still waiting to find out what Bauxite’s recommendation is for the new bid.
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.