Shares in Kenmare Resources soared as much as 52 per cent in London on Thursday as the titanium minerals miner confirmed its former managing director, Michael Carvill, has been involved in an attempt to take over the company.
Kenmare said it had rejected a joint £473 million (€565 million) proposal made by Mr Carvill and Abu Dhabi-based private equity group Oryx Global Partners as it “undervalues” the company and its prospects.
Still, the consortium has been granted limited access to Kenmare’s books to carry out due diligence as it faces a deadline of April 17th to put forward another offer – under a so-called put-up or shut-up deadline set by the Irish Takeover Panel.
Meanwhile, sources said that Kenmare also received a bid approach from British-Australian mining giant Rio Tinto last year.
Kenmare’s key asset is its Moma mine in Mozambique, which accounts for 7 per cent of the global supply of titanium minerals, including ilmenite, which is used in the manufacture of everything from paints and plastics to ceramics and textiles.
The Irish Times first reported on Thursday that Mr Carvill had sought to secure financial backers to mount a takeover bid for the company after exiting the business last August after almost 40 years at the helm. It also reported that Kenmare had received a separate approach from a mining company.
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Kenmare responded to the report with a statement before the stock market opened, saying its board had rebuffed a £5.30 a share proposal from Mr Carville and Oryx, even though it represented a 92 per cent premium to Wednesday’s closing price in London.
“However, in order to facilitate the consortium improving the financial terms of the proposal, the company has offered to provide the consortium with access to limited due diligence information,” said Kenmare.
“There can be no certainty that a firm offer will be made, or as to the terms of any such offer, should one be made.”
Shares in Kenmare ended the session up in London up 42 per cent at £3.90. They had fallen as much as 48 per cent over the previous three years.
The lack of reference to the Rio Tinto approach in the Kenmare statement reflects that this is not a live matter, said sources. Kenmare and Rio Tinto spokesmen declined to comment.
Kenmare is being advised by Rothschild, Davy and Peel Hunt.
Berenberg analyst Richard Hatch suggested in a note to clients on Thursday that Rio Tinto would be among the “limited” rival bidders that would look at Kenmare, due to its “attractive ilmenite feed for its titanium dioxide business”.
However, he noted that Rio Tinto has been busy of late on the deals front, having just completed the $6.7 billion purchase of US-based lithium miner Arcadium Lithium.
