Minerals tester Ammtec Ltd announced today its Board has decided to reject the proposed $123 million takeover offer by Campbell Brothers.

The Ammtec Board believes the Campbell Brothers offer is too low and fails to reflect the true value of the Company. "The Board had no hesitation deciding that it would recommend to shareholders that they reject the Campbell Brothers offer when it is formally received," Ammtec said in a statement to the Australian Securities Exchange.

Last week, Campbell Brothers Ltd announced its intention to offer $3.35 per Ammtec share. Campbell has yet to make a formal offer to Ammtec.

Ammtec chairman David Macoboy said the proposed offer undervalues Ammtec and provides no recognition of expected improved trading condition in fiscal year 2011 and beyond.

"Given Ammtec's bright outlook and our forecast of a very strong year in FY11, we believe this proposed offer significantly undervalues our Company by any reasonable measure," Macoboy said.

Ammtec said it is forecasting an increase in net profit after tax to between $11.1 and 12.9 million for fiscal year 2011. Revenue is expected to range between $73 and 79 million. EBITDA is expected to range between $19.6 and 22.2 million.

However, Ammtec said there is a possibility that full year 2010 results may fall slightly short of one or more of the three thresholds set out by Campbell Brothers in its takeover announcement on 18 May 2010. These are revenue from continuing operations of more than $52.5 million, operating EBITDA of more than $12.4 million and operating EBIT of more than $10.3 million.