ERAMET announces takeover offer for Mineral Deposits Ltd

ERAMET has announced that it proposes to make an off-market takeover offer to acquire all of the issued shares in Mineral Deposits Ltd (MDL) that it does not already own for A$1.46 cash per share. This is an all-cash transaction that values the equity of MDL (on a fully diluted basis) at approximately A$291 million. As part of the offer, ERAMET has acquired a relevant interest in 13.3% of MDL shares from key institutional shareholders of MDL. This includes the acquisition of 8.0% via outright purchases at the same price as the Offer Price and the execution of a pre-bid acceptance agreement in relation to an additional 5.3% of MDL. ERAMET and MDL each hold a 50% interest in the TiZir joint venture, which operates an integrated mineral sands (titanium dioxide and zircon) business in Senegal and Norway. The Offer is intended to enable the full consolidation of the joint venture after its formation in 2011.
Christel Bories, Chairman and Chief Executive Officer of ERAMET, commented: “We are convinced that our Offer is a unique opportunity for MDL shareholders. The Offer provides certainty of value at a genuinely attractive cash price for MDL shares. For ERAMET, this is a logical step, in line with the Group’s strategy, that consolidates the ownership of the TiZir asset within its portfolio at a time when the Group has improved financial flexibility. Given
the nature of TiZir and the mineral sands industry, we believe that the TiZir asset would be best placed being wholly-owned within a larger, diversified portfolio such as ERAMET’s. It is the right move done at the right time.”
MDL management is currently opposing the offer: “For reasons that will be disclosed in its target’s statement, MDL views the offer as highly opportunistic. It takes advantage of sharply improving commodity prices and improved operational and financial performance of the TiZir joint venture. In doing so, the offer denies MDL shareholders the opportunity to realise what MDL considers to be the true value of their investment. That ERAMET, a partially French government-owned corporation and trusted joint venture partner in TiZir, did not approach MDL before announcing its offer and has elected to pursue a hostile transaction supports MDL’s view of the opportunistic nature of the offer.”
TiZir is a vertically integrated zircon and titanium business which owns the Grande Côte mineral sands mine in Senegal and the TiZir Titanium and Iron ilmenite upgrading facility in Norway. The company is jointly owned 50/50 by MDL and ERAMET.