Azure Minerals welcomes increased takeover offer from SQM and Hancock Prospecting
Azure Minerals’ (ASX: AZS) board and major shareholders have given their approval to a significantly upgraded takeover offer for the company launched today by Chilean lithium giant Sociedad Química y Minera de Chile S.A. (SQM) and Gina Rinehart’s Australian mining giant Hancock Prospecting.
Azure’s main asset is its battery metals-rich Andover project in Western Australia’s Pilbara region.
An Andover exploration target has been published, encompassing an estimated range of potential mineralisation of 100 to 240 million tonnes grading at 1.0% to 1.5% lithium oxide.
The Azure board has unanimously recommended shareholders take up the offer in the absence of a superior proposal, while two of the company’s major shareholders – Creasy Group and Delphi Group – have notified that they each intend to support the transaction.
New binding transaction
With that support behind it, Azure has entered into a new binding transaction implementation deed with SQM and Hancock Prospecting under which it is proposed that the joint bidders will acquire 100% of the shares for a cash amount of $3.70 per Azure share or, if that proposal is not successful, by way of an off-market takeover offer for a cash amount of $3.65 per Azure share.
The transaction replaces SQM’s October offer of $3.52 cash per Azure share and a fallback takeover offer of $3.50 cash per Azure share.
Joint bidding agreement
Confirming that they intend to work together on other potential acquisitions, SQM and Hancock have entered into an agreement governing how the Azure joint bid will be made.
The transaction is subject to limited conditions including obtaining Foreign Investment Review Board and specific competition law approvals, as well as Azure shareholders approving the joint bid arrangements between SQM and Hancock.
“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’s 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.”
Growing stable
Hancock Prospecting chief executive officer Garry Korte said the partnership with SQM will bring the complementary skills of the two companies into the Western Australian mining landscape.
“With Hancock reviewing a number of early stage lithium prospects, this offer continues Mrs Rinehart’s substantial support for the Western Australian mining industry.”
“As Mrs Rinehart says, ‘when mining does well, so do Australians.’”
Lithium takeovers on the rise
The new takeover bid for Azure comes at a time when Australia’s lithium mining sector is awash in a wave of corporate activity.
In late October, SQM revealed it would be joining Calidus Resources (ASX: CAI) in developing the Pirra lithium project in Western Australia.
SQM has agreed to provide significant new funding and acquire a 30% interest in project operator Pirra Lithium from partner Haoma.
By providing $3 million in new funding for the Pirra project, SQM has increased its total stake in Pirra Lithium to 40%.
Gina Rinehart also recently bid $1.3 billion for 19.9% interest in Liontown Resources (ASX: LTR), helping block global giant Albemarle’s previous $6.6 billion takeover offer for the Western Australian lithium developer.