Likelihood of offer price increasing?, page-46

Its really heating up! Might be another trade left in azs lol

The Pilbara lithium deals frenzy fuelled by Chris Ellison and Gina Rinehart may be coming to a head, with rumours swirling that the two billionaires are plotting an attempt to gazump a $1.63 billion bid for Azure Minerals.

Shares in Azure Minerals leapt 4.6 per cent above Chilean giant SQM’s $3.50 per share off-market takeover bid, finishing trade on Tuesday at $3.65. Speculation is mounting that a rival bid is looming for Azure, with a combined bid from Mrs Rinehart and Mr Ellison suggested by market sources as the most logical scenario. It is understood major Azure shareholder Mark Creasy is not behind any potential takeover move.

Azure announced on Thursday that it had signed a binding implementation transaction with SQM. The two-pronged takeover offer encompasses a scheme of arrangement priced at $3.52 a share, but if that fails SQM will launch a conditional off-market takeover bid at $3.50. The off-market component will likely force any potential interloper to launch an improved takeover bid to rival the one tabled by SQM — which is Azure’s largest shareholder with a 19.9 per cent holding.

Sources close to the deal told The West Australian that the two-pronged approach was formulated as a spoil-proof structure after the fallout of Albemarle’s failed $6.6b bid for Liontown Resources via a scheme of arrangement. Mrs Rinehart’s investment vehicle — Hancock Prospecting — acquired a 19.9 per cent blocking stake in Liontown, essentially killing off any deal as there was no off-market takeover option in Albemarle’s offer. Liontown’s share price has nearly halved since the $3 per share offer was scuppered.

But the bolstered deal structure presented by SQM did not deter Mrs Rinehart from making a move on Azure, with Hancock Prospecting buying an 18.3 per cent stake in the takeover target.

In a statement last Friday Hancock said there were “encouraging results from initial drilling” at Azure’s flagship Andover lithium and nickel-copper-cobalt project in the Pilbara, but more work was required to estimate a mineral resource and evaluate its potential.

The Board of Azure has recommended shareholders vote in favour of the scheme of arrangement with SQM, but Mr Creasy, who has a 13.2 per cent stake in the company, is yet to indicate his support.

Meanwhile, Mr Ellison’s Mineral Resources is fresh off a share raid to acquire a 19.85 per cent stake in lithium hopeful Wildcat Resources.

Wildcat’s flagship Tabba Tabba lithium project is also located in the Pilbara near MinRes’ 50-per cent owned Wodgina lithium project, in addition to being 80km from the port of Port Hedland.

Mr Ellison chairs Delta Lithium, a company also backed by Hancock, which owns the Mt Ida lithium project in the Pilbara. Hancock has lithium tenements adjacent to Mt Ida.

MinRes is also set to finalise the acquisition of the Bald Hill mine from liquidators this month. Bald Hill is about 80km from Liontown’s early-stage Buldania lithium project.