Lithium hopeful Azure Minerals strikes $1.63b sale to Chile’s SQM

afr.com:

ASX-listed lithium explorer Azure Minerals has agreed to sell itself to Chilean giant Sociedad Química y Minera for $1.63 billion, as deal fever sweeps through the West Australian lithium sector.

Azure’s board accepted an offer of $3.50 a share, a staggering 54 per cent higher than SQM’s first approach of $2.31 which it lobbed last month.

Before Azure became a takeover target, shares in the lithium hopeful were worth just 12¢ in January, valuing the company at $68 million. Azure is seeking to build its flagship Andover project in the West Pilbara.

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SQM is the largest shareholder in Azure with a 19.9 per cent stake, and is eager to grow its Australian lithium footprint as a way of diversifying beyond Chile. SQM is already partnering with Wesfarmers on WA’s Mt Holland lithium mine and Kwinana lithium hydroxide processing plant.

Azure told the market on Thursday that major shareholder, Delphi Group, intends to support the bid.

Delphi’s support shapes as a coup for SQM given the German group had frustrated Genesis Minerals’ attempts to acquire 100 per cent of Dacian Gold over the past year.

Explorer Mark Creasy’s company Yandal owns just over 13 per cent of Azure shares and 40 per cent of the Andover project.

“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,” said Tony Rovira, Azure’s managing director.

“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.”

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