Australian rare earths miner Lynas Corp (ASX: LYC) has declined to engage with conglomerate Wesfarmers on its conditional $1.1 billion takeover approach for the only proven producer of rare earth elements outside China. Wesfarmers had made a buyout offer of A$2.25 per Lynas share.
Australian retail-to-chemicals company Wesfarmers had approached a vulnerable Lynas Corp with a A$1.5 billion ($1.1B) takeover offer that, it said, provided the financial means and political experience needed for the miner to solve its crisis in Malaysia. Lynas, which has a mine in Western Australia and an $800 million processing plant in Malaysia, is facing problems getting licence renewals for the plant due to concerns over waste storage.
Lynas' Malaysian operating licence is up for renewal in September and new, tough conditions recently imposed by the Southeast Asian country pose a regulatory hurdle for the company.
Westfarmers' offer carried significant conditions, including that the transaction would be subject to "ensuring that relevant operating licences in Malaysia are in force and will remain in force for a satisfactory period following completion of the transaction."
The bid did not appease shareholders of the retail-to-chemicals conglomerate, and they dumped the company's stock in Tuesday's session on concerns around Lynas' processing plant in Malaysia.
(With files from Reuters)