Lynas says no to Wesfarmers $1.1 billion takeover bid
Australia’s Lynas corp has said no to Wesfarmers $1.1 billion takeover bid on Wednesday, sending Wesfarmers shares in further decline
Lynas said it would not engage with Wesfarmers on the bid just a day after Wesfarmers offered a $1.1 billion takeover bid to the rare earths company.
The Lynas board said it “will not engage with Wesfarmers on the terms outlined in the indicative and highly conditional proposal,” the company said in a statement on Wednesday.
It comes after, Wesfarmers launched a bid of A$2.25 per Lynas share on Tuesday, which represented a near 45% premium to the rare earths miner's previous close.
The bid failed to appease shareholders of the retail-to-chemicals conglomerate who dumped the company's stock in Tuesday's session on concerns around Lynas' processing plant in Malaysia.
Wesfarmers share price continues to fall
Wesfarmers shares were down 3.8% on Tuesday, in their biggest fall in a month, dropping the company’s market value by an estimated A$1.4 billion.
On Wednesday the shares continued to fall, dropping a further 0.3% at time of writing.
Wesfarmers shares have accounted for most of the losses on the benchmark.
Analysts say investors were concerned about Lynas’ processing plant in Malaysia, which sent shares down after the bid announcement on Tuesday.
Wesfarmers surprise move for Lynas was criticised by analysts, who viewed the offer as being too low. Wesfarmers said they made the bid to acquire new growth areas.
Lynas share price
Lynas shares closed 35.1% higher on Tuesday, falling short of the offer price.
Lynas’ $800 million processing plant in Malaysia, is facing problems getting licence renewals for the plant due to concerns over waste storage.
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