(2015-05-21) The takeover of Irish mining firm Kenmare Resources by Australian suitor Iluka seems still to be in the very early stages, based on comments from the latter’s managing director, reports ‘The Irish Examiner’ today.
Perth-based Iluka approached Kenmare with a revised non-binding takeover proposal last month, after being initially rebuffed last year. It owns the Moma titanium mine in Mozambique.
The latest approach doesn’t represent a firm bid but would value a deal at about EURO 265m. While Kenmare recently expressed openness to the proposal, that doesn’t mean it is recommending a deal to its shareholders. However, the Irish firm’s board has said it is in its shareholders’ interests for the company to continue engaging with Iluka.
Yesterday, Iluka reported post-tax losses of US$62.5m (EURO 56m) for 2014, down from an US$18.5m profit in the previous year and dragged down by an US$86.5m non-cash impairment charge relating to its US operations.
Bound by takeover rules, Iluka’s managing director, David Robb said for the Kenmare offer to proceed, his board “need to have confidence around the financial merit and the value creation opportunity for our shareholders and our ability to manage Kenmare’s operation for the benefit of all stakeholders.”
“Reading between the lines, the commentary from Iluka would suggest limited progress as yet on meeting the stated pre-conditions”, said Gerry Hennigan, mining and exploration analyst at Goodbody Stockbrokers.
A determination from the Mozambique Tax Authority for any capital gains tax liability and confirmation on the specific terms of repayment of Kenmare’s outstanding debt, upon change of ownership, are among the key pre-conditions to a deal.
Source: The Irish Examiner
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