PERTH (miningweekly.com) – The directors of takeover target World Titanium Resources have advised shareholders to reject a takeover offer from fellow-listed mineral sands producer Base Resources.

Base launched an off market takeover offer for World Titanium in December, offering one of its own shares for every five World Titanium shares held. Based on the closing price of Base shares on December 22, the offer represented a value of 4c a World Titanium share.

The offer was subject to a number of conditions, including a 40% acceptance condition.

The offer, which represented a 118% premium to the one-month volume weighted average price of World Titanium’s shares, was supported by the takeover target’s largest institutional shareholder, JP Morgan Asset Management, which had entered into a prebid acceptance for its 7.7% shareholding in World Titanium.

With the acquisition of World Titanium, Base was hoping to gain ownership of the Toliara Sands project, in Madagascar, effectively extending the company’s mineral sands project interest and diversifying its project and geographical risk profiles.

However, the directors of World Titanium on Monday told shareholders that the bid price was lower than the market value received for World Titanium shares, pointing to a December transaction in which AMED Fund II SICAR acquired some 62-million shares at the company, at the price of 6c each.

Furthermore, World Titanium pointed out that since that transaction, the company’s shares had continued to trade at prices above the valuation of the Base offer.

Furthermore, World Titanium pointed out that it had received notice from a number of its shareholders, accounting for more than 60% of its shareholding, that they would not be accepting the Base offer, rendering mute the 40% acceptance condition.

“Under these circumstances, Base will be able to walk away from this bid unless it waives this condition. It remains to be seen whether or not Base will proceed with this offer,” World Titanium said in a statement.