Wesfarmers share price: Wesfarmers makes $1.1 billion bid for Lynas
Wesfarmers have made a A$1.5 billion takeover offer for Lynas on Tuesday morning. A near 45% premium to Lynas’ last traded price.
Australian retail giant Wesfarmers has announced it has bid to acquire niche rare earths miner Lynas for A$1.50 billion.
The strategic approach from Wesfarmers opens opportunity to obtain Lynas in Western Australia. Which is also the world’s sole producer of rare earths outside of China.
Wesfarmers also operates home improvement depot Bunnings, and recently spun off supermarket chain Coles group.
‘We also acknowledge the importance of the Lynas Advanced Materials Plant in Malaysia and the strong contribution made by Lynas’ management team and its employees across all operations. We expect Lynas’ employees to continue to play an important role in taking the company forward.’ Wesfarmers said in an announcement.
Lynas' share price near 18-month lows on licence issues
Westfarmers made an offer of A$2.25 per Lynas share, a near 45% premium to the miner's closing share price.
It comes as Lynas shares were at near 18-month lows after facing difficulties over environmental licences in Malaysia, where its chemicals plant is located.
Wesfarmer’s proposal is dependent on Lynas having relevant operating licences in Malaysia for satisfactory periods after the deal is closed.
Analysts expect more bidders to emerge
Analysts say the price is too low and expect other bidders to likely pay more.
Wesfarmers share price
Wesfarmers shares fells to their lowest in 1 month after announcing the takeover bid for Lynas.
Wesfarmers shares fell 3.6% to A$33.76, marking their biggest intraday percentage fall since February this year.
The Wesfarmers stock has hit its lowest since March 6 on Tuesday, making it the top percentage loser on the benchmark S&P ASX200 index, at time of writing.
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