Monday 18th Jun, 2018

Shareholders stifle Eramet’s MDL bid

Money. Photo: Jim Wilson
Photo: Jim Wilson

A bid by French miner Eramet to acquire its ASX-listed business partner Mineral Deposits Limited has been further challenged by a group of shareholders arguing for a near 60% boost in the takeover offer currently on the table.

Eramet failed to win board approval for its $1.46 per share offer for MDL lobbed in April.

The market appears to agree that offer was below what was fair, with MDL trading well above $1.70 per share in recent weeks.

But now a group of major shareholders have reportedly formed an alliance demanding Eramet offer closer to $2 a share for the business if it wants serious consideration.

Eramet, a Paris-headquartered mining and metallurgical giant, owns a 13.3% stake in MDL.

Its original takeover offer represented a 26% premium on the last closing price of MDL shares, but was viewed as “opportunistic” by the MDL board.

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.

In May, 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.”