SQM and Gina Rinehart’s Hancock Prospecting have collaborated to launch a joint, higher bid for Azure Minerals (ASX:AZS), surpassing SQM's previous solo effort a couple of months ago.
In a statement to the ASX on Tuesday morning (trading in Azure shares was halted on Monday at the company’s request), Azure announced that it had entered into a new binding Transaction Implementation Deed with SQM (a Chilean-Chinese controlled group) and Hancock Prospecting Pty Ltd.
Azure stated that its board had approved the new offer, subject to no superior proposal being received.
The statement outlined that the Joint Bidders (via SH Mining Pty Ltd) will acquire 100% of the shares in Azure through a scheme of arrangement for a cash amount of A$3.70 per Azure share, up from the initial offer of $3.52 per share.
Additionally, if the Scheme Proposal is not successful, SH Mining will make an off-market takeover offer for a cash amount of A$3.65 per Azure share.
Azure shares edged up to $3.69 in early trading and then eased to $3.67 as traders reviewed the takeover details and realized that the combination of the two, with support from two other significant shareholders, practically guarantees the deal—61% of the company is now behind the new offer, compared to SQM’s original 19.9%.
The offer is not subject to any due diligence, funding requirements, or minimum acceptance conditions, with approval by the Foreign Investment Review Board being the major hurdle.
This development may bring into play the 23.77% stake in SQM held by China’s Tianqi, which is already a major shareholder and customer of the Greenbushes lithium mine in Southwestern WA.
"The Transaction replaces the existing SQM transaction announced by Azure on 26 October 2023, which comprised a scheme proposal of A$3.52 cash per Azure share and a fallback takeover offer of A$3.50 cash per Azure share,” Azure stated on Tuesday.
Azure also noted that two major shareholders have given their approval to the new offer: the Creasy Group (linked to Mark Creasy, the owner of 40% of the Andover lithium project in the Pilbara, the core asset of Azure, which owns 60%), and Delphi Group, a global investor. This approval is contingent on no higher offer being received.
In terms of ownership, SQM owns 19.9%, Hancock owns 18.3%, the Creasy Group owns 12.84%, and Delphi Group owns 10.15%, totaling nearly 61.2% and control.
With the joint bidders starting with 38.2% of Azure, it will be difficult to frustrate the bid.
Tuesday's statement did not mention Mineral Resources, the Perth-based lithium group controlled by Chris Ellison, which holds a 13.56% stake in Azure.
Furthermore, if the scheme is blocked or the vote at a meeting is unsuccessful, the Creasy Group and Delphi have indicated they will accept the second offer (a combined 23.99% stake) when it becomes unconditional, subject to no superior offer emerging.
