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May 23 (Reuters) - Australian lithium miner Kidman Resources on Thursday agreed to be acquired by Wesfarmers for A$776 million ($534 million) in a deal that will give the retail conglomerate entry into the booming electric vehicle market.
The two companies entered into a scheme implementation deed after Wesfarmers, which launched its bid for Kidman earlier this month, completed due diligence, the parties said in separate statements.
The A$1.90 per share bid is subject to a shareholder vote, which is likely to be held in August, the lithium miner said. Kidman directors and major shareholders plan to support to the deal.
“The Kidman Board has concluded unanimously that realisation of a significant premium to the undisturbed market value ... is in the best interests of all our shareholders,” Kidman Chairman John Pizzey said.
The offer was pitched at a 47 percent premium to Kidman’s last closing price on May 1.
Wesfarmers said it expects to spend about A$700 million to develop Kidman’s Mt Holland lithium project, with first production of lithium hydroxide targeted in the second half of 2022.
The conglomerate has also signed an agreement with Sociedad Química y Minera de Chile S.A (SQM), Kidman’s joint venture partner at Mt Holland, which would prevent the Chilean company from entering talks with any party proposing to make a competing offer for Kidman.
Wesfarmers’ bid for Kidman followed closely on a $1.1 billion offer for rare earths producer Lynas Corp, which has so far strenuously fended off its suitor.
$1 = 1.4537 Australian dollars Reporting by Aditya Soni in Bengaluru; editing by Richard Pullin