Lithium explorer Azure says $900m SQM takeover offer not enough

afr.com:

Lithium heavyweight SQM faces having to stump up well over $1 billion to secure a Perth-based exploration company worth just $70 million at the start of the year after having initial takeover offers rejected.

Azure Minerals said on Tuesday that it had spurned indicative and conditional takeover offers from New York-listed SQM.

Azure Minerals boss Tony Rovira. Ross Swanborough

The most recent SQM cash offer came on July 12 at an indicative price of $2.31 a share and valued Azure at more than $900 million.

The Azure share price jumped almost 12 per cent to $2.62 when it emerged from a trading halt on Tuesday morning.

Azure has a 60 per cent stake in the Andover lithium discovery in iron ore mining country south-east of Karratha. Legendary prospector Mark Creasy owns the remaining 40 per cent of Andover and has a 13.4 per cent stake in Azure.

SQM is the biggest shareholder in Azure after paying about $20 million for a 19.99 per cent stake in January when the stock was trading at about 22¢.

Azure said the recent takeover offers from SQM, Wesfarmers’ partner in the Mt Holland lithium project in WA, had been non-binding and conditional, including in regard to Foreign Investment Review Board approval.

“Following careful consideration of the content of these approaches and in light of our rapidly evolving understanding of the potential of the Andover lithium project, Azure determined that the approaches did not warrant further engagement by the company and no further discussions have occurred,” Azure said.

Azure stock has traded above the $2.31 offer price in recent weeks and hit an interday high of $2.96 on August 8 on the back the release of an exploration target touting estimated potential mineralisation of 100-240 million