Australian billionaire Gina Rinehart’s Hancock Prospecting has partnered with Chile’s SQM to acquire Australian lithium developer Azure Minerals for AUD 1.7 billion ($1.14 billion), Kallanish reports.

Under a new binding transaction implementation deed (TID), the two companies will acquire 100% of Azure’s shares for AUD 3.7 per share. This is 5.1% higher than SQM’s previous solo offer of AUD 3.52/share. 

If this is unsuccessful, SQM and Hancock – Azure’s largest shareholders – will acquire the company in an off-market cash takeover offer for AUD 3.65 each. This option would allow mining billionaire Chris Ellison’s Mineral Resources (MinRes), which owns a 13.6% stake in Azure, to approve the deal without selling its stake. 

Azure’s board unanimously supported SQM’s offer in October and was awaiting a shareholder vote on the scheme early next year. Soon after, however, Hancock built up its stake in the junior miner to 18%, allowing the firm to potentially block SQM’s bid. Now, the duo has teamed up as joint bidders, marking Rinehart’s first big lithium partnership.

“The transaction delivers a fantastic outcome for Azure shareholders, including a significant uplift in value from the original SQM transaction despite elevated market volatility and the recent deterioration in lithium prices,” says Azure’s managing director, Tony Rovira. 

Two of Azure’s major shareholders, Creasy Group (12.8%) and Delphi Group (10.2%), have confirmed to Azure that they plan to sell their shares in the absence of a superior proposal for Azure, Hancock said in a separate statement. 

“This powerful partnership [with SQM] brings together the complementary skills of our respective companies across West Australian mining exploration, development, operation and processing for the long term,” adds Hancock’s chief executive Garry Korte. “With Hancock reviewing a number of early-stage lithium prospects, this offer continues Mrs Rinehart’s substantial support for the West Australian mining industry.”

SQM’s chief executive Ricardo Ramos says the “highly attractive” revised offer provides Azure shareholders a “compelling cash value in a time of broader volatility.” With a current 19.4% stake in Azure, the Chilean lithium giant notes it is looking forward to deploying its lithium expertise and progressing the Andover exploration drilling to unlock the asset’s full potential.

Azure’s shareholders are expected to vote on the deal in mid-March 2024.