Kenmare looks set for €265m buyout from Australia's Iluka
Irish mining firm Kenmare Resources looks set to be acquired for A$371m (€265m) by Australian firm Iluka.
The board of Kenmare Resources told shareholders this morning that if a formal offer is forthcoming from Iluka that it would be in the interests of the Irish company’s shareholders.
“The board of Kenmare has reviewed the proposal carefully and has considered Kenmare’s financial position, prevailing market conditions and the terms of the debt amendment announced today,” the company said.
“Having taken independent advice and subject to its fiduciary duties, the Board of Kenmare believes that it is in Kenmare’s shareholders’ and other stakeholders’ interests for Kenmare to continue to work with Iluka towards satisfaction of the pre-conditions to Iluka’s proposal.”
Shares in Kenmare opened up over 37pc this morning. Under the terms of the proposed offer, Kenmare shareholders would receive 0.016 shares in Iluka for every Kenmare share they own. Iluka currently has a market capitalisation of A$3.5bn (€2.5bn).
Kenmare has been struggling financially and has been involved in marathon negotiations to restructure its debt. It has also been hit by falling resources prices.
Headed by managing director Michael Carvill, Kenmare has one operational asset – the Moma ilmenite, zircon and rutile mine in Mozambique. It is one of the biggest ilmenite mines in the world. Ilmenite is used to make titanium.
Kenmare also released a first quarter update this morning.
Mr Carvill said Kenmare’soperations had been “severely impacted” by power outages.
The amount of ore mined plunged by 57pc in the first three months of this year compared to the first quarter of 2014.