Australia-based mineral exploration company Azure Minerals has agreed to a takeover bid of A$1.63bn ($1.03bn) from SQM Australia, a fully owned subsidiary of Sociedad Química y Minera de Chile (SQM).
The parties have entered into a binding transaction implementation deed in this regard.
As per the terms of the transaction, SQM will take full ownership of Azure Minerals by paying A$3.52 ($2.22) per share in cash to shareholders of the latter, which is listed on the Australian Securities Exchange (ASX).
If the scheme turns out to be unsuccessful, then SQM will launch a conditional off-market takeover proposal for A$3.5 ($2.21) per share in cash.
The offer price is 44.3% premium to the last closing price of A$2.44 per Azure Minerals’ share on 20 October 2023.
In August 2023, Azure Minerals rejected SQM’s previous takeover offer, which represented a total consideration of A$901.4m, citing the growing potential of the Andover lithium project located in Pilbara, Western Australia.
The revised bid from the Chile-based SQM represents a premium of 52.4% to the previous offer of A$2.31.
Azure Minerals’ board has unanimously recommended the transaction in the absence of a better offer. This is also conditional on pending confirmation by an independent expert that the scheme remains in the best interests of the company’s shareholders and that the takeover offer is fair and reasonable.
Furthermore, Delphi Group, a significant shareholder in the company, plans to back the transaction, provided no superior proposal arises.
Azure Minerals managing director Tony Rovira said: “Having carefully considered the merits of the Transaction, the Azure Board has unanimously concluded that the Transaction is in the best interests of Azure shareholders.
“Whilst we firmly believe that Andover has the potential to be a major lithium project, there is significant time, cost and risk associated with developing a project of this scale, particularly in the context of an uncertain broader economic outlook.
“As such, the Board believes that the Transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels.”
The Australian company owns a 60% stake in the Andover project. The remaining 40% stake is owned by Creasy Group.
Azure Minerals said that the transaction is subject to limited conditions, including SQM getting approval from the Australian Foreign Investment Review Board (FIRB).
