Azure Minerals (ASX:AZS) rockets 44pc after $1.6Bn takeover bid from SQM (NYSE:SQM)
October 26, 2023Lithium explorer Azure Minerals (ASX:AZS) has rocketed by up to 44% by lunchtime after unveiling a $1.6 billion takeover bid from a lithium major that values its shares at a premium of up to 56%.
The A$3.52-a-share offer was a 44% premium to the last traded price of A$2.44 on October 20 and a 56% premium to the 10-day volume-weighted average price of A$2.26.
It was the second bid this year from Sociedad Química y Minera de Chile S.A (NYSE:SQM), with the new bid being a 52% premium to SQM’s previous A$2.31 offer in August.
Lithium major Sociedad Quimica y Minr de Chile SA (NYSE:SQM) holding a smidgen less than 20%.
Azure’s board has unanimously recommended the sale to SQM, noting there were no superior proposals in play, and put a condition on their seal of approval.
The condition was an independent expert concluding the scheme was in the best interests of shareholders and the takeover was fair and reasonable.
Azure Managing Director Tony Rovira said the board believed the transaction was a fantastic culmination of hard work put in over many years.
“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,” Rovira said.
“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 transaction … presents a great outcome for other stakeholders in Andover, who will benefit from the project being developed by an experienced, well-capitalised and highly regarded company in SQM.
Major shareholder Deutsche Balaton AG / Delphi Unternehmensberatung AG (Delphi Group) plans to back the transaction, as long as no superior proposal emerges.
More than 45% of the company’s securities are tightly held, with legendary Australian prospector and mining entrepreneur Mark Creasy becoming a cornerstone investor in Azure in 2020 on introducing the Andover project to Azure through a joint venture arrangement.
Creasy holds a current stake of about 13.2% of Azure through the group’s Yandal Investments vehicle.
The major investor currently holds 13.2% of Azure through the group’s, held through the Creasy Group investment vehicle Yandal Investments.
To get a necessary 75% shareholder backing for the proposal, SQM is likely to need the A-OK from Yandal.
As a joint venture partner on Andover and other projects, Creasy is set benefit from Azure’s flagship project being developed beyond any sale of Azure to SQM or another buyer.
Azure’s securities sat up $1.05 or 43% to $3.49 by lunchtime today.
About Azure
Azure is a Western Australian company focused on building lithium resources at its flagship Andover lithium and nickel-copper-cobalt project in the West Pilbara, which extends over 108 square kilometres immediately south of Roebourne and 35km southeast of the mining hub of Karratha.
The West Perth company also has copper, silver, zinc and gold properties, including the Barton gold and base metal project, the Turner River gold project near De Grey Mining’s (ASX:DEG) Hemi gold project, and Coongan gold project.
The company holds Andover, Turner and Coongan in joint-venture arrangements with the Creasy Group.
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