Originally posted by Hintery
↑Wesfarmers ‘open to more Lynas deal talks’ AUS 12Apr
Wesfarmers says it remains open to engage with rare-earths producer Lynas over its $1.5 billion takeover proposal despite the growing hostilities between the two parties. In a statement issued late yesterday, the Perth-based conglomerate also moved to assure Lynas’s Malaysian workforce about their future.
The relationship between Wesfarmers and Lynas has grown increasingly toxic this week amid criticism of Wesfarmers’ conduct. Wesfarmers revealed late last month that it had approached Lynas with a $2.25-a-share conditional offer, and soon after began discussions with the Malaysian government. While there have been tensions between Lynas and Malaysia for several years over the mildly radioactive waste produced at Lynas’s rare-earths processing plant in Kuantan, supporters of Lynas blamed the intervention of Wesfarmers for the announcement by Malaysian Prime Minister Mahathir Mohamad last Friday of additional conditions for the plant.
Malaysia now wants the early-stage “cracking and leaching” of its rare earths — the same stage that produces the radioactive residues — to occur outside Malaysia, a condition that will potentially require hundreds of millions of dollars in additional investment by Lynas.
Wesfarmers said it was “very disappointed” by the mischaracterisation of the discussions and events relating to its proposal for Lynas. “We are limiting what we say because we are continuing to honour our obligations to Lynas, as frustrating as that is given the attacks that are being made on Wesfarmers’ reputation and integrity,” the company said. “But we also want to be constructive and we remain open to engage with Lynas on the matter that should be of most importance to both companies’ shareholders, being the value of Lynas.”
Wesfarmers also sent a message to Lynas’s Malaysian workforce, highlighting the potential growth it would be able to bring to the Malaysian business if it was successful in gaining control of Lynas. “We recognise and acknowledge the importance of the Lynas operations and highly skilled team in Malaysia,” Wesfarmers said. “In the event Wesfarmers was to be in a position to acquire Lynas, we anticipate the plant and the team in Malaysia would benefit from the attributes that Wesfarmers can offer, including further capital investment and a track record of working with stakeholders to deliver sustainable, positive outcomes for local communities.”
Lynas employees and opponents of the company both held rival protests in Malaysia earlier this week, underscoring the deep divisions in the country over the contentious project.
Lynas itself has spent much of its history struggling with balance-sheet issues and has only turned one full-year profit in its history. Its last set of accounts included a going concern warning from its auditors given the ongoing regulatory impasse between the company and the Malaysian government and the prospect that the Malaysian plant may have to shut down in September if Lynas could not secure a new licence.
PAUL GARVEY
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