The fate of Azure Minerals has seemingly been decided, with Chilean lithium giant SQM to partner with Gina Rinehart’s Hancock Prospecting in acquiring the lithium explorer.
SQM and Hancock are set to buy Azure for $3.70 per share via a scheme of arrangement. If this is unsuccessful, the two parties will acquire the lithium upstart through an off-market takeover valued at $3.65 per share.
The transaction replaces SQM’s previous offer announced in late October. This comprised a scheme proposal of $3.52 per share and a fall-back takeover offer of $3.50 per share.
SQM and Hancock’s joint $3.70-per-share proposal values Azure at $1.7 billion and represents a 63.9 per cent premium to Azure’s 10-day volume-weighted average price (VWAP) of $2.26 per share up to Friday October 20 – the day before SQM’s original proposal was announced.
Given the backdrop of falling lithium prices, Azure said it was ecstatic to attract such a lucrative offer.
“The transaction delivers a fantastic outcome for Azure shareholders, including a significant uplift in value from the original SQM transaction despite elevated market volatility and the recent deterioration in lithium prices,” Azure managing director Tony Rovira said.
“The transaction also represents a great outcome for wider stakeholders in Andover, who will benefit from the significant financial strength and expertise of one of Australia’s largest and most well-respected mining and exploration companies, Hancock, combining with SQM to oversee the successful development of Andover.
“We encourage all Azure shareholders to support the transaction.”
Azure said it has the backing of Mark Creasy’s Yandal Investments, which owns 12.84 per cent of the company’s shares, and Delphi Group, which owns 10.15 per cent of the company’s shares, to proceed with the transaction.
Rinehart has made her lithium intentions clear in recent months, seemingly interjecting Albemarle’s takeover bid of Liontown Resources and also climbing her way up the Azure register in the wake of SQM’s initial proposal being announced.
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