Kenmare Resources has walked away from takeover talks with its former managing director Michael Carvill and an Abu Dhabi private equity firm after the consortium made it clear it would only be willing to proceed with a bid that was below its initial £473 million (€553 million) proposal.
Shares in the titanium minerals miner plunged as much as 23.3 per cent in Dublin to levels near where the stock was trading in early March, before it emerged that it had received a bid approach.
Kenmare said in a statement on Thursday that its board unanimously rejected the revised pricing “on the basis that it significantly undervalued Kenmare’s business and its prospects”.
Kenmare, which operates the Moma mine in Mozambique, confirmed on March 6th that it had received an approach from Mr Carvill, who founded Kenmare in 1986 and led it until his exit last August, and Oryx Global Partners Limited on foot of an Irish Times article that the former MD was circling the business.
It said at the time that it had rejected the original proposal, pitched at £5.30 per share, as undervaluing the company. However, it offered the consortium access to its books to carry out due diligence, with a view to improving the offer.
Mr Carvill told The Irish Times the lower proposal was partly down to concerns about titanium minerals prices as the global economic outlook has deteriorated since the initial bid approach, amid concerns about the Trump administration’s trade policies and escalating conflict in the Middle East. It also reflected how the Mozambique government is seeking higher mineral processing and exporting royalties from Kenmare, he said in response to questions.
“Kenmare supported the consortium in its due diligence process and gave the possible offer extensive consideration, despite its early stage and unsolicited nature,” chairman Andrew Webb said. “The board will continue to review all opportunities to create significant long-term value for all of our stakeholders, including our shareholders”
Mr Webb said Kenmare was “highly confident” in its prospects as an independent company and its ability to deliver on its strategic and operational objectives.
“Moma is one of the world’s largest titanium minerals deposits, with a multi-decade mine life, a consistent low-cost profile, and substantial inherent value. Kenmare remains on track to achieve its 2025 production guidance and has a strong order book for the second half of 2025,” he added.
The announcement of the breakdown in talks comes a day before a so-called put-up-or-shut-up bid deadline was due to run out. The Irish Takeover Panel had originally given the consortium until mid-April to make a revised offer, but subsequently extended it twice as talks continued.
A key issue in the background has been Kenmare’s ongoing discussions with the government of Mozambique on an extension of a production royalty agreement, or what is called an implementation agreement, relating to Moma. A 20-year agreement expired before Christmas last year. However, the terms of that accord remain in place until a new one is reached, allowing it to continue to process minerals and export final products. Mr Carvill said Mozambique is looking for more royalties under a new deal. A spokesman for Kenmare declined to comment.
Kenmare said in a trading update in April that it experienced stable market conditions in the first quarter of this year, with encouraging demand for its key product, ilmenite, which is used in the manufacture of everything from paints and plastics to ceramics and textiles.
