TAKEOVER discussions between Kenmare Resources and a consortium that included its former managing director ended in failure, the parties said on Thursday.
“Following a comprehensive due diligence process and after accounting for its findings, the Consortium was unable to reach alignment with Kenmare on its updated valuation and as a result the Consortium has ceased engagement,” said Oryx Global Partners.
Oryx and Michael Carvill tabled a lower, second offer to their initial £5.30 per share offer on March 6 (then worth €565m) for Kenmare, according to the mineral sands miner.
“During Kenmare’s most recent engagement with the Consortium, it was made clear by the Consortium that it would only be willing to proceed with an offer at pricing substantially below the initial proposal,” said Kenmare in an announcement.
In addition, the revised offer was subject for an additional period of due diligence to “conclude financing and other arrangements,” said Kenmare.
“The Board of Kenmare, together with its advisers, considered the revised pricing and unanimously rejected it on the basis that it significantly undervalued Kenmare’s business and its prospects.”
With takeover discussions closed Kenmare’s existing management, led by MD Tom Hickey, can focus on the business of mining ilmenite and zircon from Moma, its mine in northern Mozambique. This includes the commissioning of the Wet Concentrator Plant A upgrade at the Nakata ore zone, the largest deposit of mineral sands at Moma. Kenmare is targeting the third quarter for the project completion.
There’s also the delicate task of discussions with Mozambique over the extension of an Implementation Agreement that governs the processing and export of mineral sands from Moma. Kenmare said Hickey had met with Daniel Chapo, Mozambique’s president last week in which Kenmare’s legacy and plans were discussed.
The Implementation Agreement should have been renewed by December 21 but was not approved by the Mozambican Council of Ministers “notwithstanding Kenmare’s clear right to such an extension,” the company said previously. The agreement under discussion does not relate to the project currently underway at the Nataka ore zone.
Commenting on the takeover talks, Kenmare chairman Andrew Webb said his company had supported the takeover discussion process despite their unsolicited nature. He added that Kenmare’s board would “continue to review all opportunities to create significant long-term value for all of our stakeholders, including our shareholders”.
