Titanium firm’s acquisition bid hits a wall
What you need to know:
- The Australian Securities Exchange (ASX)-listed company’s bid to buy World Titanium Resources failed after the latter’s board recommended that its shareholders spurn the takeover bid. Base Resources announced the plan last month.
- In a statement sent to ASX yesterday, Base Resources said it is optimistic that the planned takeover will succeed, and urged World Titanium shareholders to accept the bid.
- Base Resources has also warned that the takeover could lead to some redundancies, following a review of employees that will be required to continue with the Toliora Sands project.
An attempt by Base Resources, the company currently mining titanium in Kwale, to tighten its grip on the industry in East Africa could collapse after an attempt to acquire a company in Madagascar was rejected.
The Australian Securities Exchange (ASX)-listed company’s bid to buy World Titanium Resources failed after the latter’s board recommended that its shareholders spurn the takeover bid. Base Resources announced the plan last month.
World Titanium Resources, also an Australia-listed firm, operates Toliora Sands project in Madagascar.
In a letter to shareholders, signed by chairman Nic Limb, World Titanium board urged owners to reject Base Resources’ offer on grounds that the bid price is lower than the market value for the firm’s shares. World Titanium Resources board also cites the offer as highly conditional, with huge risks to their investment.
“Your directors have reviewed the Base bidder’s statement and unanimously recommend that shareholders reject this uncertain non-cash takeover bid. Importantly, the Base bid is conditional,” reads the letter.
ACCEPT THE BID
In a statement sent to ASX yesterday, Base Resources said it is optimistic that the planned takeover will succeed, and urged World Titanium shareholders to accept the bid.
“Base notes the recommendation of the board of World Titanium that their shareholders reject the offer. The directors of Base continue to believe there are compelling reasons to accept the offer and encourage World Titanium shareholders to read the bidder’s statement carefully,” it says.
Should a deal be sealed, World Titanium is expected to be de-listed from ASX. The firm is currently estimated to have a market capitalisation of $9 million (Sh819 million).
Base Resources has also warned that the takeover could lead to some redundancies, following a review of employees that will be required to continue with the Toliora Sands project.
The company, through its local subsidiary Base Titanium, has been recording increased mineral sales from the Kwale Mineral Sands project since it made the first export in February 2014.
VOLUME OF EXPORTS
Its quarter three 2014 results indicate that 130,000 tonnes comprising ilmenite, rutile and zircon minerals extracted from the titanium ore were shipped, representing a 20 per cent increase in the volume of minerals exported from the site.
The firm exported a combined 108,238 tonnes comprising various quantities of the minerals shipped during the previous quarter.
