ILU Iluka Resources Limited

(Adds comment by Kenmare Resources.)

 
   By Rhiannon Hoyle and Ian Walker 
 

SYDNEY--Iluka Resources Ltd. (ILU.AU) said it has ended takeover talks with Kenmare Resources PLC (JEV.DB) because it believes the mineral sands company's biggest shareholder, Prudential PLC (PUK), wouldn't support its proposed all-share offer.

Responding to the news Kenmare Resources said it is now focused on securing its future as an independent firm and plans to raise extra funds and restructure its balance sheet, to enhance its working capital position.

"Following the withdrawal of the Iluka approach, and the related lifting of the restrictions on the company that applied during the offer period, Kenmare is now focused on securing the independent future of the company in the interests of all of its stakeholders," Kenmare said.

The company said it expects to raise the money through a share placing and open offer, and has already received support from State General Reserve Fund, a sovereign wealth fund of the Sultanate of Oman. State General Reserve Fund has agreed to invest $100 million in the placing.

The company didn't provide any further information on the capital raising but said it now plans to start talks with lenders and key shareholders, which it expects to take a "number of weeks".

However, it cautioned that there remains a number of matters that need to be agreed to enable the company to deliver the planned capital raising, and there can be no certainty at this time that they will be achieved.

Perth-based Iluka has been trying to acquire Dublin-based Kenmare for more than a year, and last month submitted a final proposal worth 0.007 Iluka shares for each Kenmare share.

Iluka's initial offer--rejected by Kenmare's board in June 2014--was for 0.036 of its own shares for each Kenmare share. Iluka said its most recent offer was lower to reflect weakening commodity prices.

"The reason for terminating discussions is based on information from Kenmare that its largest shareholder will not support the transaction at a level Iluka is prepared to offer," Iluka said in a regulatory filing Monday. "The interest held by the largest Kenmare shareholder is of a size such that it alone could likely prevent implementation of an acquisition."

Prudential has a 20% stake in Kenmare, according to the company's website.

-Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com and Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

December 07, 2015 05:11 ET (10:11 GMT)

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