PERTH (miningweekly.com) – Rare earths miner Lynas went into a trading halt on Tuesday after fellow-listed Wesfarmers launched a A$2.25c a share cash offer for the company.
The A$1.5-billion cash bid offered a premium of 44.7% to Lynas’ last closing price, and a 36.4% premium to its 60-day volume weighted average share price.
Wesfarmers told its shareholders that the company was uniquely placed to support Lynas’ future through futher capital investment to support downstream processing assets and realise the full potential of the Mt Weld orebody. The company would also offer ‘highly complementary’ mining and chemical processing expertise and a track record of working well with diverse government and other stakeholders to deliver sustainable, positive outcomes for local communities.
“An investment in Lynas leverages our unique assets and capabilities, including in chemical processing, and will deliver Lynas’ shareholders with an attractive premium and certain cash return,” said Wesfarmers MD Rob Scott.
“We also acknowledge the importance of the Lynas Advanced Materials Plant in Malaysia, and the strong contribution made by Lynas management team and its employees across all operations. We expect Lynas’ employees to continue to play an important role in taking the company forward.”
The cash offer was subject to a number of conditions, including the completion of a due diligence, and the execution of an implementation agreement, as well as assurance that all the relevant operating licences in Malaysia are in force and will remain so for a ‘satisfactory period’ following the completion of the transaction.
The deal was also subject to regulatory and shareholder approvals.
Lynas’ Malaysian plant underwent scrutiny from a government-appointed Review Committee during the six months ended December, with the committee in December finding that the operations were at low risk and compliant with applicable laws.
However, the Atomic Energy Licensing Board has issued the company with two new preconditions for its licence renewal relating to the management of two residues produced by the Malaysian operation.
While the company has developed an action plan for one of the residues, it has appealed the condition related to the second.