An independent expert has said ASX-listed mineral sands producer Mineral Deposits Limited (MDL) is worth 40% more than French bidder Eramet has offered.
MDL’s board recently recommended shareholders reject an offer lobbed by Eramet, saying it was an “opportunistic” offer which undervalued the business.
This week it released its formal statement with regards to the offer, and again reiterated to shareholders they should reject the takeover bid.
Paris-headquartered mining and metallurgical firm Eramet on April 27 lobbed a $1.46 per share bid for 100% of Mineral Deposits, after buying a 13.3% stake in the company from a selection of large existing shareholders.
The takeover offer represented a 26% premium on the last closing price of MDL shares, a 33% premium on the shares’ one-month volume-weighted average price (VWAP), a 30% premium on the three-month VWAP, and a 37% premium on the six-month VWAP.
Eramet and Mineral Deposits are 50:50 partners in the TiZir joint venture, which operates an integrated mineral sands business in Senegal and Norway, producing titanium dioxide and zircon.
“We are convinced that our offer is a unique opportunity for MDL shareholders,” Eramet chief executive Christel Bories said.
Bories said the move would be a logical step for Eramet to consolidate ownership of TiZir, which he says “would be best placed being wholly-owned within a larger, diversified portfolio such as Eramet’s”.
But this week MDL said a review of the offer conducted by an independent expert from Grant Samuel & Associates concluded Eramet’s offer to be “neither fair nor reasonable”.
The independent expert assessed the real value of MDL shares to be closer to $2.04 – 40% more than Eramet is offering.
“The Target’s Statement has been served on Eramet and lodged with the Australian Securities and Investments Commission today,” MDL said on May 22. “The Target’s Statement will be dispatched shortly to MDL shareholders who received Eramet’s Bidder’s Statement.”