Sierra Rutile recommends Iluka Resources takeover

AIM-listed Sierra Rutile (SRL) said on Monday that its board of directors and major shareholder have accepted a takeover bid from Australian mineral sands miner Iluka Resources that values the group at £215m.

Under the terms of the acquisition, Sierra Rutile shareholders will receive 36p in cash for each of their shares. This represents a discount of 1.4% to the closing middle market price of 36.5p per share on 29 July, which was the last business day before the offer was announced.

Chairman Robert Edwards said: “The acquisition enables all SRL shareholders to realise value today in cash for their shares at an acceptable level after the management of SRL has achieved all of its immediate goals with respect to optimising the asset base.

“Iluka has an established track record in the mineral sands sector and will be able to support SRL's longer term growth and optimisation ambitions. We believe that the acquisition provides attractive certainty and liquidity for SRL and its shareholders as a whole."

Sierra’s largest shareholder, Pala - which has an interest of around 53% - has undertaken to vote in favour of the deal, as has shareholder Neon.

“Since only a simple majority (i.e. 50%) is required to be obtained 'at a duly convened meeting', we see this as effectively being a ‘done deal’,” said Shore Capital.

At 1055 BST, Sierra shares were down 5.3% to 34.57p.