Australia’s Azure Minerals Limited (ASX: AZS) has accepted the latest US$1 billion cash takeover bid from Sociedad Química y Minera de Chile (SQM) (NYSE: SQM) after rejecting a smaller offer from the major Chilean lithium company in August.
On Wednesday, SQM announced the offer before it was accepted by Azure the following day through a binding transaction implementation deed. Prior to successful bid, SQM was a major shareholder in Azure, holding a 20 per cent stake purchased in March this year for US$20 million.
The proposed deal will see that SQM acquires the remaining shares of Azure at $3.07 a piece. Azure’s stock value has been rising rapidly in recent days, by almost 800 per cent in the past six months.
However, multiple reports in the media suggested that the transaction may be thwarted by Australia’s richest woman Gina Rinehart and her company Hancock Prospecting, which holds a 19.99 per cent stake in Azure. The Australian mining entrepreneur Mark Creasy, who currently holds a 13.2 per cent stake in the company, may also consider making a move to block the deal from being finalized.
Creasy’s investment business, the Creasy Group, holds a 40 per cent stake in Azure’s flagship Andover lithium project. Rinehart recently blocked Albemarle Corporation’s (NYSE: ALB) $6.6 billion bid for Australia’s lithium company Liontown Resources Limited (ASX: LTR) by raising her stake in the junior miner to almost 20 per cent.
“Having carefully considered the merits of the transaction, the Azure Board has unanimously concluded that it is in the best interests of Azure shareholders,” said Azure’s Managing Director Tony Rovira.
“The Andover lithium project fits perfectly with our lithium business portfolio, being fully aligned with our strategy of adding value to greenfield projects by deploying our core competencies in lithium geology, mining, processing, refining and project development,” said SQM’s CEO Ricardo Ramos in a statement. SQM has also recently expanded its lithium influence in Australia by agreeing to purchase a 40 per cent stake in Pirra Lithium Limited, which holds 1,411 square kilometres of lithium exploration tenements in the country.
Our second largest position Azure Minerals (AZS) +43% today, after a cash buy-out offer from lithium producer SQM
Australian listed AZS is responsible for one of the largest lithium discoveries worldwide, valued at A$1.6 billion
Their project is based in the Pilbara region,… pic.twitter.com/y3bhh69SGp
— Willem Middelkoop (@wmiddelkoop) October 26, 2023
Read more: Lithium South Development first production well installed at Hombre Muerto lithium project
Read more: Lithium South Development expands production goals, updates PEA on Hombre Muerto lithium project
SQM operates a lithium hydroxide and lithium carbonate producing operation in the Salar del Carmen (Carmen salt flats) located in Chile’s south.
Recent developments in South America’s lithium industry such as the Azure acquisition or the US$90 million investment in Argentina Lithium & Energy Corp. (TSX-V: LIT) (OTC: PNXLF) from Stellantis (NYSE: STLA) at the end of September have prompted a rising interest among investors in production of the commodity within the continent.
Lithium South Development Corporation (TSX-V: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) is another company operating in South America that has been expanding its footprint in the lithium industry and positioning itself for substantial growth.
The company recently installed its first production well at its flagship Hombre Muerto North operation in Argentina following a 175 per cent increase in its lithium brine resources at the site. The project holds 1.58 million tonnes of lithium carbonate equivalent.
Lithium South shares rose by 1.6 per cent Thursday to $0.32 on the TSX Venture Exchange.
Lithium South is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
