Mineral Deposits Ltd. said May 10 that it recommended shareholders reject Eramet's proposed off-market takeover offer, saying the deal is "grossly inadequate" and undervalues the company.
In its proposal, Eramet, which is Mineral Deposit's partner in the TiZir Ltd. joint venture, intends to acquire shares in the company that it does not own for A$1.46 per share in an all-cash transaction that values Mineral Deposits at about A$291 million.
The proposed deal was said to be "opportunistic" and will deprive Mineral Deposits' shareholders of the full value of their investment, the miner's directors said in a statement. In addition, Eramet's offer does not fully reflect that TiZir's strategically integrated assets are operating at or near record highs, with potential for future growth.
Eramet also provided only the minimum information disclosure, given its privileged, inside position as a joint venture partner, and is misrepresenting Mineral Deposits' position on profitability and dividend payments, the latter company said.
Meanwhile, a data room has been established and Mineral Deposits is in discussions with international parties that may be interested in submitting higher bids.
In a separate, same-day statement, the miner said it expects to produce 815,000 tonnes of heavy mineral concentrates this year and 745,000 tonnes in 2019, compared to 724,755 tonnes in 2017.
Revenue for 2018 is pegged at US$317 million and between US$345 million and US$456 million in 2019, from US$225 million in 2017.