Aussie tycoon doubles down as lithium spoiler

Azure Minerals

30/10/2023 04:15

(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
       MELBOURNE, Oct 30 (Reuters Breakingviews) - Lithium M&A
is becoming a dangerous sport Down Under. On Friday, Hancock
Prospecting, owned by Australia’s richest person Gina Rinehart,
revealed it had snapped up an 18.3% stake in Azure Minerals
 AZS.AX . A day earlier her quarry, which is developing a
project in Western Australia to mine the metal crucial for
electric-vehicle batteries, agreed to a $1 billion takeover
offer from the world’s second-largest lithium player, Chile’s
SQM  SQMA.SN .
    It’s the second time of late that Rinehart, whose wealth the
Australian Financial Review pegs at some $24 billion, has
intervened in a tie-up. The 19.9% stake she amassed in Liontown
Resources  LTR.AX  made her the company’s largest shareholder
and prompted suitor Albemarle  ALB.N  two weeks ago to drop its
$4.3 billion takeover.
    SQM probably won’t cave as easily. Unlike Albemarle, it has
not tied its hands by declaring the Azure bid to be its best and
final offer. SQM also already owns 19.9% of its target and has
secured the support of another 24% or so, per analysts at
Canaccord.
    Granted, the so-called scheme of arrangement method of
buying an Australian company usually requires a buyer to secure
backing from 75% of voting shareholders. But SQM boss Ricardo
Ramos can switch to an off-market offer and try to buy other
investors’ stakes first. Rinehart’s experience of scooping up
shares, though, may give her the upper hand. (By Antony Currie)
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 (Editing by Peter Thal Larsen and Thomas Shum)