Waratah on Thursday said it had adopted a 180-day shareholder rights plan in a bid to buy time to assess an unsolicited offer from Palmer's Canadian company Mineralogy Pty Ltd, which wants to take a controlling stake.
Mineralogy's $C1.41 ($A1.81) a share offer, launched last week, is for a 50.1 per cent stake of Waratah that values the target at more than $100 million.
Mineralogy is owned by Palmer, who is also the largest shareholder of iron ore explorer Australasian Resources Ltd.
The rights plan restricts anyone from acquiring more than 20 per cent of the company's outstanding shares.
The plan is subject to approval by the Toronto Stock Exchange, on which Waratah is listed.
Waratah has appointed a special committee to assess the bid, initally saying it was opportunistic and substantially undervalued the company.
The committee, comprising directors Howard Stack, Andrew Wilson and Nicholas Mather, will review Mineralogy's offer and make a formal recommendation to shareholders.
It has also engaged Merrill Lynch Canada Inc and Torys LLP to assist with the evaluation of the offer.
"Until we are in a position to provide more informed views ... we are advising that shareholders take no action in respect of the Mineralogy offer," Stack said.
