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Kiss and make-up: Azure Minerals and major investors near resolution

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2023-12-18

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Azure Minerals (ASX:AZS) and its four significant investors, who have spent the majority of the past month in a wary standoff, are finally making amends this week. A flurry of share buying and transactions led to substantial holdings, followed by a period of silence. However, recent reports suggest that discussions are now underway between SQM, the Chilean-Chinese lithium giant, Gina Rinehart's Hancock group, Chris Ellison's Mineral Resources, and the major shareholder, Mark Creasy.

Trading in Azure shares was suspended on Monday at $3.63 as the company announced an upcoming "material update" regarding the $1.6 billion takeover bid from Chilean giant SQM, expected to be revealed by Wednesday, December 20. While no further details have been disclosed, Western Australian mining industry insiders are speculating that a peace settlement will be unveiled this week.

Hancock holds approximately 18%, Mineral Resources around 12.3%, Mark Creasy possesses about 13.2%, and SQM maintains a 19.9% stake in Azure. Azure also owns 60% of the highly prospective Andover lithium prospect in the Pilbara, with Mark Creasy owning the remaining 40% and playing a pivotal role in any potential deal.

SQM's $3.52 per share offer is contingent on "no shareholder, other than SQM, acquiring more than a 19% interest in Azure." SQM also has a backup plan with its $3.50 per share off-market takeover, which would require 50.1% acceptance. While this would grant majority ownership, it would necessitate the removal of Hancock and Mineral Resources for a compulsory takeover, an unlikely outcome. Therefore, a deal or partnership appears to be the most viable solution for the time being.

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