- Bunnings Warehouse and Kmart conglomerate owner Wesfarmers will purchase lithium explorer Kidman Resources for $776 million
- The deal from May was greenlit after Kidman shareholders voted in favour by a landslide 94.65 per cent
- The most attractive Kidman asset for Wesfarmers, the Earl Grey lithium project in regional Western Australia, holds 189 million tonnes of lithium resources
- Wesfarmers has already shown intent to fund $700 million to the project, planning the construction of a lithium hydroxide plant slated for 2022 — the same target year for production kicking off from the project
After approval from shareholders, Wesfarmers will purchase lithium-focused explorer Kidman Resources for $776 million.
Kidman shareholders voted in favour for the Wesfarmers buyout by a landslide 94.65 per cent — a response to intent first shown in May.
“This approval by Kidman shareholders is one of the most important milestones in our proposed acquisition of Kidman and subsequent participation in the development of the Mt Holland lithium project,” Wesfarmers Managing Director Rob Scott said.
The Mt Holland lithium project, also known as the Earl Grey lithium deposit, is located in regional Western Australia.
The project, half-owned by Kidman, spans 284 kilometres and is estimated to hold 189 million tonnes of Lithium reserves.
According to Kidman Resources, Earl Grey is one of the world’s most significant lithium deposits. The other half of the project’s interest is held by Chilean lithium producer Quimica y Minera de Chile (SQM).
The joint venture between Kidman and SQM is also currently working towards the construction of a lithium hydroxide plant to accompany the Earl Grey project.
Earl Grey, however, is not an active producing project yet, and the processing plant is slated to coincide with first production in 2022.
Wesfarmers has already shown intent to spend $700 million on furthering development at Earl Grey, located 300 kilometres east of Perth Western Australia.
The buyout from Wesfarmers still remains subject to Australian Federal Court approval, with a hearing set for September 12.
If approval is granted by the Court, Kidman shareholders will be entitled to $1.9 in cash per Kidman share.
The $1.9 payout per share to Kidman holders is the same as the company’s share pricing in the ASX today. Kidman Resource’s market cap is currently valued at $767 million.
Wesfarmers shares are trading at a 0.68 per cent premium today for $39.48 apiece. The ASX 200 company’s market cap is currently valued at $44.45 billion.