
Bauxite Resources has lodged a Supplementary Target’s Statement on Feb 2 in relation to the recent Bidder’s Statement for the Off Market Cash Offer from Mercantile OFM. Mercantile OFM recently increased its offer to 11 cents per share for 50% of your shares in BRL (6 cents per share after the 5 cent return of capital).

Though the Independent Expert, BDO Corporate Finance now considers the revised Offer of 11 cents per share fair and reasonable to BRL shareholders that are not associated with Mercantile OFM, BRL’s directors continue to recommend its shareholders to reject the offer.
They argued that the offer is for only 50% of your shareholding, is less than BDO’s preferred value on a control basis. The also emphasised that even if Mercantile are successful in their bid for control of BRL, shareholders will still be left with 50% of their shareholding with little or no capacity to influence the future direction of the Company, since Mercantile would liquidate the assets of the Company and exit all the mining projects.
BRL’s current board and management wished to stay on and continue to follow the combined Bauxite and Silica strategy that the Company has been undertaking. This, they think will offer shareholders the potential for substantial value accretion over time. BRL is currently considering the potential for spinning off its wholly owned subsidiary, Australian Silica Quartz (ASQ).
BRL’s current board and management continued to highlight their ability to the orderly marketing and sale of surplus assets while reducing the operating costs of the company through downsizing, reduction f board fees and renting of assets. They hoped to internally generate at low cost new projects such as the recently announced Silica projects, with the potential to create substantial value for shareholders over time.
They said Mercantile’s intentions were not sufficiently clear regarding the takeover bid, because, if the bidder wanted to effectively liquidate the Company, they should have offered to buy all of the shares.
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