Mercantile OFM, a subsidiary of Mercantile Investment Company, has announced its intentions to make an off-market takeover bid for half of all Bauxite Resources shares it doesn’t own at a price of 9 cents a share.
OFM chairman Ron Brierley has released a letter addressed to Bauxite shareholders offering them a price of 9 cents a share, a 14 per cent increase on the last sale price of 7.9 cents a share.
Brierley cites Bauxite’s 10 years of unsuccessful ventures and $48 million in losses as reasons to place the remaining surplus “back in shareholders’ hands”.
Mercantile’s propositions as a result of the share purchase offer include repaying shareholders, negotiating a joint venture termination with HD Mining & Investment, divestment of fixed assets (including two farming properties), cancelling further explorations and settling liabilities.
“After 10 years unsuccessfully searching for bauxite, lithium and silica sands, it is time to call a halt,” said the chairman. Brierley also said that a quote from Bauxite’s latest annual report detailing plans for new business opportunities that would better utilise cash resources was regarded by the investment firm as an “ominous” statement.
The board of Bauxite has subsequently released a counter-statement, explaining that it is currently “considering its response” and advising Bauxite shareholders to “TAKE NO ACTION” [emphasis Bauxite] until they receive forma recommendation.