Wesfarmers (WFAFF) recently launched a conditional, non-binding, indicative cash offer to acquire Lynas Corporation (LYSCF), a rare earth producer, at A$ 2.25 per share (around 45% premium to the last closing price), A$ 1.5 billion in total. The proposal was conditional upon the following terms:
Though the Wesfarmers bid was swiftly rejected, we think it could be the first shot in a drawn-out bidding war as other strategic investors will want to get in on the action given Lynas' depressed price. We think further bids while the Malaysian license renewal continues