(Reuters) - Titanium miner Kenmare Resources Plc (I:JEV) (L:JEV) received a watered-down share offer from Australia's Iluka Resources Ltd (AX:ILU), valuing the Irish company at about 189 million pounds ($292.5 million), and said that it was talking to Iluka.
The latest offer of 0.016 Iluka share for each Kenmare share is much lower than an earlier proposal of 0.036 share per Kenmare share made last June.
Kenmare shares jumped more than 38 percent to 4.29 pence on the London Stock Exchange (LSE) on Thursday morning.
The latest offer represents a more than 100 percent premium to Kenmare's Wednesday close on the LSE.
The proposal is in line with Iluka Chief Executive David Robb's strategy to use the company's strong balance sheet to expand by bargain hunting.
Kenmare had rejected a previous offer saying it did not place sufficient value on its main asset, the Moma titanium minerals mine in Mozambique.
However, Kenmare said on Thursday that considering its financial position, prevailing market conditions and terms of a debt amendment, it was in the interests of its shareholders to work with Iluka on the proposal.
"The Kenmare Resources board has effectively ratified the offer by intending to work with Iluka towards satisfaction of the preconditions," Investec analysts said in a note.
Iluka said it would provide further details if the transaction proceeds.
Kenmare shares have lost more than 70 percent of their value until Wednesday since rejecting Iluka's first offer last June.
Iluka shares closed at A$8.16 Thursday on the Australian Stock Exchange.