Australian lithium miner – Kidman Resources has announced a takeover bid has been advised by Wesfarmers for an amount of $776 million. The news comes only 2 months after Wesfarmers made an unsuccessful bid for rare earth miner – Lynas Corporation for an amount of up to $1.5 billion.
Kidman’s board announced this morning that they will engage with Wesfarmers in order to finalize a binding transaction that will then be presented to shareholders. Kidman has also granted Wesfarmers exclusive rights to complete their due diligence until the end of May.
Under the proposed offer, Wesfarmers intends to acquire all Kidman shares for a price of $1.90 each. This is almost a 50% premium on Kidman’s last closing price of $1.29 on Wednesday.
Although the deal seems attractive, there are still a number of regulatory hurdles including shareholder and government approvals, as well as agreement from JV partner SQM. However, three of Kidman’a major shareholders, representing 16% of the entire stake, have noted that they would be in favor of the takeover should it become binding.
