In today’s briefing:
- JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected
- Gina Joins SQM In Bid For Azure (AZS AU)
- Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer
- Lithium Power (LPI AU): Scheme Vote on 23 January
- Codelco’s Offer For Lithium Power (LPI AU): 23th Jan Shareholder Vote
- Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS
JSR (4185) – Deal Approval Unexpectedly Delayed, As Expected
- Today after the close, JSR Corp (4185 JP) announced that the expected “end-December” commencement of JIC’s Tender Offer to take the company private would be delayed.
- This was somewhat expected to widely expected based on initial FUD which then gave way to “specialised reporting” a couple of weeks ago which indicated as much.
- Here I look at potential implications, spreads, and risks. And it still looks like one has to let it run (and buy a dip).
Gina Joins SQM In Bid For Azure (AZS AU)
- This makes life a lot simpler. Gina Rinehart’s Hancock Prospecting will now team up with Chile’s SQM to take control of lithium play Azure Minerals (AZS AU).
- In a binding Offer, by way of a Scheme, the joint bidders (collectively holding ~37.79%) are offering A$3.70/share, a 5.1% bump in terms to SQM’s prior Scheme Offer.
- An off-market takeover at A$3.65/share unfolds IF this Scheme were to fail. If both fail/lapse, SQM will, “in certain circumstances”, be required to proceed with its off-market transaction of A$3.50/share.
Azure Minerals (AZS AU): SQM/Hancock Team up for a New Offer
- Azure Minerals (AZS AU) has entered a new transaction implementation deed with Sociedad Quimica y Minera de Chile (SQM US) and Hancock at A$3.70, a 51.6% premium to the undisturbed price.
- The emergence of Hancock and Mineral Resources (MIN AU) as substantial shareholders necessitated the new offer. The off-market takeover offer is A$3.65 per share if the scheme fails.
- The scheme’s completion hinges on MinRes’ acceptance. MinRes could potentially block the scheme but has a history of selling into Hancock offers.
Lithium Power (LPI AU): Scheme Vote on 23 January
- The Lithium Power International (LPI AU) IE considers Codelco’s A$0.57 offer fair and reasonable as it is above the midpoint of its A$0.30-0.68 per share valuation range.
- The scheme is conditional on FIRB approval, which should be forthcoming as LPI’s assets are outside Australia in Chile.
- Irrevocables represent 32.05% of outstanding shares. At the last close and for the 16 February payment, the gross/annualised spread was 3.6%/26.3%.
Codelco’s Offer For Lithium Power (LPI AU): 23th Jan Shareholder Vote
- Back on the 18th October, Lithium Power International (LPI AU) announced it had entered into a Scheme Implementation Deed with Chilean state miner Codelco, the world’s largest copper producer.
- Codelco offered LPI shareholders A$0.57/share, a heft 119% premium to last close. LPI’s major shareholder, Minera Salar Blanco SpA with 27.88%, is supportive of the Scheme..
- LPI’s Scheme Meeting has now been tabled for the 23 Jan, with implementation expected on the 16 February. The IE is supportive and LPIs board unanimously recommends the transaction.
Russell 2000 Testing 1.5+ Year Resistance; Downgrading Communications; Steel Buys $NUE $STLD $ZEUS
- The market remains in “lockout rally” mode, where prices continue to move higher with little-to-no pullbacks, while ignoring overbought readings.
- We have discussed this on a weekly basis since 11/21/23. Still no reason to fight this bullish trend, and we continue to expect more upside into year-end and early 2024.
- We highlight buys in Steel: NUE, STLD, RS, WOR, TMST, ZEUS, LatAm Banks: ITUB, BSBR, BBD, BAP, BCH, Industrials: ITT, FSS, SPXC, ATS, KAI, CR, BRC, SXI, and HSC
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