Ron Brierley’s Mercantile gains momentum in play for Bauxite Resources
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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.