Kenmare ends talks with former MD and Abu Dhabi firm as they lower bid
The titanium minerals miner 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 to the consortium access to its books carry out due diligence, with a view to improving the offer.
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'Kenmare supported the consortium in its due diligence process and gave the possible offer extensive consideration, despite its early stage and unsolicited nature,' said managing director Tom Hickey. 'The board will continue to review all opportunities to create significant long-term value for all of our stakeholders, including our shareholders'
Mr Hickey said Kenmare is 'highly confident' in its prospects 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.
Kenmare chairman Andrew Webb told the group's annual general meeting last month that the consortium could not make an offer conditional on a new implementation agreement being struck.
'Either you have to take the risk yourself [as a bidder] or wait until it is resolved and then make a bid,' he said at the time.
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.
Although demand remained healthy, the market continued to be modestly oversupplied due to new supply from concentrates producers entering the market, it said. This continued to negatively impact average received prices, however prices 'now look to be stabilising', it added.
Still, the global economic outlook has deteriorated since the consortium made its initial bid approach, amid concerns the Trump administration's trade policies and escalating conflict between Isreal and Iran in the Middle East.
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