Azure Minerals Limited (ASX: AZS), a notable player in the mining industry, has announced entering into a binding Transaction Implementation Deed (TID) with mining giants Sociedad Química y Minera de Chile S.A. (SQM) and Hancock Prospecting Pty Ltd (Hancock). This agreement proposes that the Joint Bidders, through SH Mining Pty Ltd (BidCo), will acquire 100% of the shares in Azure. The deal offers Azure shareholders A$3.7 per share under the Scheme Proposal, or A$3.65 per share through an off-market Takeover Offer, collectively known as the “Transaction.”

Details of the Proposed Transaction

The joint bid by SQM and Hancock, governed by a Joint Bidding Agreement, supersedes the original SQM transaction announced on 26 October 2023. The new Scheme Proposal of A$3.70 per Azure share implies a fully-diluted equity value for Azure of approximately A$1.70 billion. This offer represents a significant premium over previous proposals, including a 5.1% increase over the original SQM scheme of A$3.52 per share and over 60% premium to the 10-day VWAP and SQM’s non-binding indicative offer (NBIO).

Conditions and Shareholder Approval for the Acquisition

The Transaction is contingent on several conditions, including approval from Australia’s Foreign Investment Review Board (FIRB), competition law approvals, and Azure shareholder approval. Notably, the Takeover Offer is not subject to any financing or due diligence conditions. The Azure Board has unanimously recommended the Transaction, in the absence of a superior proposal, contingent upon an independent expert’s approval.

Major Shareholders’ Support and Transaction Outlook

Major shareholders Creasy Group and Delphi Group have expressed their intent to support the Transaction, subject to no superior proposal emerging. If the Scheme Proposal does not become effective by the End Date, and the Takeover Offer is withdrawn or lapses, SQM is obliged to proceed with the takeover offer component of the Original SQM Transaction at A$3.50 per Azure share.

Azure’s Future Post-Acquisition

Azure’s Managing Director, Tony Rovira, commented on the Transaction, highlighting it as a favorable outcome for shareholders, especially given the market’s volatility and recent downturn in lithium prices. Rovira also pointed out the benefits for Andover stakeholders, with the combined financial strength and expertise of Hancock and SQM overseeing the site’s development.

  Australia, Azure Minerals, Hancock Prospecting, SQM, Tony Rovira