Lynas rebuffs Wesfarmers’ US$1.1b takeover bid
SYDNEY: Australia’s Lynas Corp Ltd yesterday said it will not engage with conglomerate Wesfarmers on its “highly conditional” US$1.1 billion (RM4.46 billion) takeover approach for the only proven producer of rare earth elements outside China.
The rejection came a day after Wesfarmers launched a bid of A$2.25 (RM6.75) per Lynas share, which represented a near 45 per cent premium to the rare earths miner’s close on Monday.
Lynas shares closed 35.1 per cent higher on Tuesday, falling short of the offer price.
“The Lynas board will not engage with Wesfarmers on the terms outlined in the indicative and highly conditional proposal,” said the company.
Flush from asset sales and the spin-off of supermarket chain Coles Group, Wesfarmers had made a surprise move for Lynas in a bid to acquire new growth areas.
However, the bid failed to appease shareholders of the retailto-chemicals conglomerate which dumped the company’s stock on concerns around Lynas’ processing plant in Malaysia.
Lynas, which has a mine in Western Australia and a US$800 million processing plant in Malaysia, is facing problems getting licence renewals for the plant due to waste storage concerns.
Analysts have viewed the buyout offer as being too low, adding that rival bids might emerge from Japanese or international trading houses, given Lynas’ role in a niche commodity market.