Gina Rinehart puts her $20bn to work in brazen Azure lithium raid

Billionaire Gina Rinehart, chairman of Hancock Prospecting. Picture: Philip Gostelow/Bloomberg

Gina Rinehart is back to upset yet another takeover of an Australian listed lithium miner, buying shares in Azure Minerals just hours after the explorer backed a $1.6bn buyout deal from industry heavyweight SQM.

It was understood the mining mogul was amassing a 5 to 6 per cent stake through Euroz Hartleys Group, buying between 23 million and 24 million shares before the market closed on Thursday at $3.50 each.

The iron ore billionaire was understood to be in the market for 10 per cent, adding to her existing holding believed to be about 3 to 4 per cent.

The raid on Azure Minerals came on the same day the company announced to the market it had reached a deal for lithium mining heavyweight SQM to buy the business for $1.6bn or $3.52 per share through a scheme of arrangement. The move saw Azure shares soar, jumping 43 per cent or $1.05 to close at $3.49.

The offer involved a special provision where it could move to a straight takeover proposal from a scheme of arrangement structure should an interloper move to interfere in a deal by acquiring a stake of around 19 per cent.

The takeover would be at $3.50 per share, also in cash.

Based on the fact that Mrs Rinehart is buying shares at the offer price, sources suggests this means she is angling for a seat at the table, rather than making moves to embark on a rival proposal.

As earlier reported by The Australian’s DataRoom, Mrs Rinehart or fellow billionaire Chris Ellison were expected to buy shares in the stock to frustrate the deal.

As well as Mrs Rinehart, Mr Ellison is also believed to be a minority holder.

Western Australia prospector Mark Creasy also holds a 13.2 per cent stake, and is the joint venture partner to Azure’s flagship Andover lithium project in Western Australia.

Azure chief executive Tony Rovira emphasised the cost and risk of delivering Azure Mineral’s large and highly lucrative Andover project, particularly in the context of an uncertain broader economic outlook.

“As such, the board believes the transaction provides Azure shareholders with a compelling opportunity to de-risk their investment and realise certain value at an attractive premium to historical trading level,” he said in a statement to the market.

Shareholders will vote in January on the agreed deal announced to the market on Thursday after the stock spent much of the week with the trading in its shares halted.

Shares are being bought just weeks after Mrs Rinehart raided the register of lithium producer Liontown Resources, buying a 19.9 per cent interest at up to $3 per share – the price offered by its suitor Albemarle.

Gina’s cash pile

Albemarle, as a result, abandoned its plan to buy Liontown, scared off by the prospect of dealing with Mrs Rinehart, who would be the kingmaker for the transaction.

Albemarle is understood to have faced challenges working with Mr Ellison on its Australian lithium processing venture.

Its decision to walk away from the Liontown offer came after there was no discussion between Albemarle and Mrs Rinehart over the transaction.

Mrs Rinehart’s company Hancock Prospecting is sitting on $20bn of cash.

Market observers believes that her moves to buy stakes in Liontown and Azure Minerals is to preserve her options while the shy but highly savvy and strategic investor determines how she wants to move forward strategically.

Mrs Rinehart, who is known for her straight shooting approach in business, targets top quality projects, a criteria which Liontown meets, while the Azure project is considered a highly promising asset.

Within her portfolio is a stake of 70 per cent in the Roy Hill iron ore mining project, Atlas Iron, 49 per cent of oil and gas company Senex and all of its rival Warrego Energy.

She owns stakes of about 4.9 per cent in Chalice Mining and Lynas, and that’s on top of the 19.9 per cent she has in Liontown Resources and Azure Minerals.

She also has shares in the rare earths producer Arafura Rare Earths and coking coal assets in Canada.

In the coming years, expectations are mounting her interests will be worth more than the market value of Rio Tinto, currently worth $166bn.