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)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
Intel’s reverse bullwhip is strong read more
Oil giants’ wavering discipline read more
Investors reject Sanofi's cure to sickly valuation read more
Amazon's grey cloud is the new blue sky read more
Ford’s electric drive is going the wrong way read more
