Large share trading sparks fresh Azure Minerals talk

Lithium ion batteries. Picture: iStock

Speculation is mounting that a rival offer could be on the cards for Azure Minerals as Chris Ellison emerged as being behind large trading on Wednesday in SQM’s takeover target.

The stock had strong trading volumes on Wednesday, suggesting a buyer such as Mr Ellison or hedge funds were at work.

It is understood that about 4 million to 5 million shares had traded at up to $3.70 per share before the market closed and he amassed at least 4 per cent.

Shares closed up 4.6 per cent to $3.65.

Sources said the buyer was Mr Ellison.

Meanwhile, at the same time, there was a theory in the market that a rival offer from two parties working together could be on its way, although the identity of the suitors was unclear.

The obvious contenders would be the two billionaires Gina Rinehart and Chris Ellison working together to unseat SQM.

Yet Mrs Rinehart has made it clear a buyout was not her intention and working with Mr Ellison would likely breach takeover laws, where a suitor can’t have more than 20 per cent of a company ahead of a bid.

Mr Ellison, who leads Australian listed mining company Mineral Resources, typically uses Bell Potter.

It comes after Chile’s SQM launched a $1.6bn bid for the business last week at $3.52 per share.

On the day the deal was announced, Mrs Rinehart amassed 18.3 per cent of the stock, buying at $3.50 per share.

She has since quitely increased that stake to 18.9 per cent.

The stake is 0.1 per cent under the 19 per cent threshold where the scheme of arrangement bid structure converts to a takeover bid arrangement.

Her company, Hancock Prospecting, said it had achieved its strategic objective with the acquisition, indicating a buyout was not on her agenda.

SQM struck a deal where it could move to a takeover bid at $3.50 per share.

Mr Ellison was earlier said to be a shareholder under 5 per cent.

This week, he purchased a 19.85 percent stake in lithium company Wildcat through Mineral Resources, as confirmed by the target on Tuesday night.

The 206.6m shares were purchased at 85c each.

Wildcat’s Tabba Tabba Lithium Project is 87km from the Wodgina Lithium Project, of which Mineral Resources has a 50 per cent ownership interest.

Mr Ellison has been muscling deeper into the lithium space, this year acquiring a stake in the $300m Delta Lithium of almost 12 per cent.

He has a holding in Patriot Battery Metals and owns about 10 per cent of Global Lithium with a $320m value.

Mrs Rinehart also last month amassed a 19 per cent stake in lithium mining company Liontown Resources, upsetting a $6bn-plus buyout plan by US-based Albemarle.

Mr Ellison’s Mineral Resources, has a market value of almost $13bn and generates income from its two iron ore hubs – Utah Point in Port Hedland and Yilgarn in Esperance, Western Australia.

Its mines are operated at Iron Valley, south of Port Hedland, and Koolyanobbing and Kumina, both in Western Australia.

As well as iron ore mining and bulk ore transportation in the Pilbara, it also operates two hard rock lithium mines in Western Australia, Mount Marion in the Goldfields and Wodgina in the Meanwhile, some believe that the latest activity puts the $11bn lithium company Pilbara Minerals in focus.

Pilbara Minerals is one of the most shorted stocks on the Australian Securities Exchange on the back of the falling lithium price, has no exploration risk and is producing large amounts of cash.

Some question whether Wesfarmers could be an interest suitor as part of its strategic objective of gaining exposure to the energy transition.