Kenmare Resources PLC has fetched backing from Berenberg analysts on anticipation of a follow up bid after it rejected a takeover earlier this week.
Setting a 580p share price target, Berenberg flagged Kenmare shares’ five-year high of 526p, adding a premium to that would “likely be attractive for the majority” of investors.
Kenmare had rejected an initial £474 million, 530p takeover proposal from a consortium led by Oryx Global Partners and former managing director Michael Carvill on Thursday.
“We believe that the market reaction and feedback to Kenmare’s board and management in response to a possible offer will be to accept an enhanced offer,” Berenberg said in response.
“[That is] given Kenmare’s mixed operating history, volatile markets and the attractive nature of an all-cash bid,” analysts added.
“With the consortium offered access to due-diligence information to improve its proposal, we think an upped bid at 580p per share would be fair and a good result for shareholders.”
Shares were up 1.4% at 395.50p on Friday.