Titanium miner Kenmare Resources today rejected a takeover bid from Australian rival Iluka Resources, saying the bid did not place sufficient value on its largest mine.
Iluka made the offer of a share-for-share exchange following a sharp downturn in the two companies' core markets which has pushed Kenmare shares down by over 40% this year.
"The board of Kenmare has rejected Iluka's proposal, which it believes does not recognise the value inherent in Moma as a long-life, low-cost asset," Kenmare said in a statement.
Kenmare shares were up over 20% in Dublin trade this morning.
The approach from the Australian mineral sands miner comes at a time when both companies are suffering from weak prices for mineral sands products like zircon and titanium.
The company said that M&G Investment Management, which manages funds owning 19.05% of Kenmare, has confirmed that it supports the board's decision.
The company's shares closed almost 30% higher in Dublin trade today.
Iluka, a A$3.5 billion ($3.29 billion) company, is the world's top producer of zircon, which is used in ceramic tiles.
Kenmare's main asset is the Moma titanium minerals mine in Mozambique. It produces titanium dioxide feedstock which is heavily used in industry for making paints, paper, plastics and pharmaceuticals.
Experts claim that global demand looks set to increase rapidly in the next three years. The mine has about 150 years of reserves.