Photo by: Bloomberg
PERTH (miningweekly.com) – The directors of ASX-listed Phosphate Australia have rejected an increased offer from suitor Mercantile Investment, saying the revised offer still undervalued the company.
Mercantile on Wednesday upped its offer price for Phosphate Australia shares from 2c each, to 2.2c each.
Phosphate Australia pointed out to shareholders on Wednesday that the revised offer price was still well below the 15.6c a share valued by an independent expert, as well as the 2.5c a share cash backing, placing zero value on the company’s projects, including the Highlands Plains project, in the Northern Territory.
Phosphate Australia chairperson Jim Richards said the revised offer from Mercantile further reinforced the opportunistic nature of the bid, by trying to acquire Phosphate Australia’s projects at essentially no cost.
“The revised offer continues to short-change Phosphate Australia’s shareholders by placing zero value on the company’s quality assets. Since Mercantile’s original offer, we have substantially added to our cash position from the sale of share assets worth more than A$800 000, which places Phosphate Australia in an even stronger cash position.”
Richards noted that shareholders would be unlikely to benefit from any future exposure to Phosphate Australia’s assets, should they accept the undervalued cash offer.
Mercantile’s offer was expected to close on May 14.