Wesfarmers' Kidman takeover a step closer
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The lithium company entered into a scheme implementation deed with Wesfarmers after the completion of due diligence.
Wesfarmers also announced that it entered into a commitment deed with Sociedad Química y Minera de Chile S.A. (SQM) relating to the Mt Holland lithium project joint venture agreement between SQM and Kidman.
In a statement, Wesfarmers said as part of the due diligence process it developed its own plan in relation to the development of the Mt Holland lithium project, and after completion of the acquisition it would propose this plan, including some scope adjustments, to the joint venture.
“Subject to final project design, movements in exchange rates, and joint venture approval, Wesfarmers estimates its share of capital expenditure for its plan for the development of the project at approximately $700 million,” it said.
“A component of the increased capital expenditure is expected to result in an improvement in plant operating efficiency.
“Under its plan, Wesfarmers expects that first production of lithium hydroxide would occur in the second half of the 2022 calendar year.”
Kidman directors, key management, and several major shareholders, which together own approximately 17 per cent of Kidman shares, support the cash offer of $1.90 per share.
The offer represents a 47.3 per cent premium to the price prior to the proposal's announcement; if the offer is approved, the scheme is expected to be completed in September.
“This is an important milestone in advancing a transaction that provides Wesfarmers with an attractive investment and delivers Kidman shareholders with a compelling premium and certain cash return,” he said.
Shares in Wesfarmers were up 1.27 per cent to trade at $37.59 each at 12.05pm AEST.