{"id":446,"date":"2023-10-26T04:42:32","date_gmt":"2023-10-26T04:42:32","guid":{"rendered":"https:\/\/economicherald.net\/?p=446"},"modified":"2023-10-26T04:42:32","modified_gmt":"2023-10-26T04:42:32","slug":"lithium-play-azure-says-yes-to-sqms-revised-cash-offer-that-values-it-at-1-63bn","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=446","title":{"rendered":"Lithium play Azure says \u2018yes\u2019 to SQM\u2019s revised cash offer that values it at $1.63bn"},"content":{"rendered":"<p>Azure board unanimously recommends SQM\u2019s $3.52 per share takeover offer that values the company at $1.63bn<br \/>\nTransaction offers shareholders \u201ccompelling opportunity to de-risk their investment\u201d and realise value at attractive premium<br \/>\nMajor shareholder Delphi Group has already committed to supporting the transaction<\/p>\n<p>\u00a0<\/p>\n<p><strong>Azure has emerged from suspension with an unanimously recommended takeover proposal from SQM that values it at an eye-popping $1.63bn, or $3.52 per AZS share.<\/strong><\/p>\n<p>The cash offer, which represents a 55.9% premium to the 10-day volume weighted average price for AZS shares of $2.26, represents a 52.4% premium to the <a href=\"https:\/\/stockhead.com.au\/resources\/eye-on-lithium-azure-dispels-notion-of-sqm-takeover-and-lake-resources-resizes-extraction-techniques\/\"><strong>previous offer<\/strong><\/a> of $2.31 per share \u2013 a clear sign of how keen the Chilean lithium giant is to fold in the Andover lithium project into its portfolio.<\/p>\n<p>And why shouldn\u2019t it?<\/p>\n<p>Andover has been the darling of lithium pundits since <a href=\"https:\/\/stockhead.com.au\/company\/azure-minerals-azs\/\"><strong>Azure Minerals (ASX:AZS)<\/strong><\/a> intersected thick, lithium mineralisation (105m grading 1.26% Li2O) in June this year.<\/p>\n<p>Subsequent drilling at the project, which is owned in partnership with legendary prospector Mark Creasy\u2019s Creasy Group (40%), proved that this was no fluke by returning multiple +100m intersections including a top 209.4m interval at 1.42% Li2O.<\/p>\n<p>This was enough for the company to define an exploration target of between 100Mt and 240Mt with a grade range of 1-1.5% Li2O, which would place Andover amongst the largest lithium deposits even if resource come in at the bottom end of the range.<\/p>\n<p><a href=\"https:\/\/stockhead.com.au\/resources\/enormous-potential-from-first-lithium-drilling-at-target-area-3-as-azure-minerals-builds-toward-a-tier-1-maiden-resource\/\"><strong>Recent drilling<\/strong><\/a> at Target Area 3 has returned thick intersections of spodumene mineralisation of up to 35.6m, which lends support to the company\u2019s belief that Andover is one of the best lithium exploration projects globally.<\/p>\n<p>Early stage testwork has also resulted in the <a href=\"https:\/\/stockhead.com.au\/resources\/test-work-returns-outstanding-5-59pc-lithium-concentrate-recovery-of-82-37pc-at-azures-andover\/\"><strong>production of spodumene concentrate<\/strong><\/a> with a grade of 5.59% Li2O at recovery of 82.37%.<\/p>\n<p>The discovery of Andover, success of subsequent exploration and SQM\u2019s initial interest have all contributed to the 918% increase in the company\u2019s share price to $2.44 since the beginning of this year to when it entered into a trading halt last week.<\/p>\n<p>Shares in the company rocketed to $3.41 after it exited suspension, giving it an YTD gain of 1450%.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Renewed offer gets the green light<\/strong><\/h2>\n<p>After having its first offer in August rebuffed, SQM revised cash offer of $3.52 per AZS share under a binding transaction implementation deed has been unanimously recommended by Azure\u2019s board in absence of a superior offer.<\/p>\n<p>It is also subject to an independent expert concluding that the offer is fair and reasonable as well as being in the best interests of shareholders.<\/p>\n<p>Major shareholder Delphi Group, which holds 10.8% of the company\u2019s shares, has already committed to supporting the transaction.<\/p>\n<p>Andover partner the Creasy Group could be due for a sizeable payout for its 13.2% stake in the company if it chooses to accept SQM\u2019s offer.<\/p>\n<p>Participants in Azure\u2019s recent equity raising priced at $2.40 per share will also be pocketing a 46.7% gain on their investment.<\/p>\n<p>Highlighting just how keen it is to bring Azure under its umbrella, SQM has also simultaneously made a conditional off-market takeover offer of $3.50 cash for each AZS share if the scheme of arrangement falls through.<\/p>\n<p>Managing director Tony Rovira said the board had unanimously concluded that the transaction is in the best interests of the company\u2019s shareholders following careful consideration of its merits.<\/p>\n<p>\u201cWhilst we firmly believe that Andover has the potential to be a major lithium project, there is significant time, cost and risk associated with developing a project of this scale, particularly in the context of an uncertain broader economic outlook,\u201d he said.<\/p>\n<p>\u201cAs such, the board believes that the transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading levels.<\/p>\n<p>\u201cThe transaction also presents a great outcome for other stakeholders in Andover, who will benefit from the project being developed by an experienced, well-capitalised and highly regarded company in SQM.<\/p>\n<p>\u201cThe board is very proud of the significant achievements of the Azure team to date, including the discovery of the world-class lithium deposit at Andover, and believes that the transaction represents a fantastic culmination of all the hard work over many years.\u201d<\/p>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span>\u00a0<\/p>\n<p><em>This article was developed in collaboration with Azure Minerals, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/resources\/lithium-play-azure-says-yes-to-sqms-revised-cash-offer-that-values-it-at-1-63bn\/\">Lithium play Azure says \u2018yes\u2019 to SQM\u2019s revised cash offer that values it at $1.63bn<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Azure board unanimously recommends SQM\u2019s $3.52 per share takeover offer that values the company at $1.63bn Transaction offers shareholders \u201ccompelling opportunity to de-risk their investment\u201d <a href=\"https:\/\/economicherald.net\/?p=446\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":1,"featured_media":251,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - 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