Kidman Resources’ Share Price Volatile on Deed with Wesfarmers
Today, Kidman Resources Ltd [ASX:KDR] announced it had entered a Scheme Implementation Deed (SID), proposing Wesfarmers Limited [ASX:WES] acquire 100% of Kidman’s shares at $1.90 by way of a Scheme of Arrangement.
At time of writing, Kidman Resources’ share price is sitting at $1.90.
What SID means for Kidman shareholders
In relation to its proposal, Wesfarmers has completed its exclusive period of due diligence, as well as entering into the SID.
If implemented, Kidman’s shareholders will get $1.90 cash for each share, valuing the company’s equity at around $776 million.
The announcement also offers an attractive premium of 47.3% to Kidman’s 1 May 2019 closing share price of $1.29, at the last trading day before its announcement of Wesfarmers proposal as well as the SID.
The decision was recommended by Kidman’s board to be in the best interest of shareholders.
Kidman Chairman, Mr John Pizzey commented on the transaction:
‘We are pleased to recommend this attractive all-cash transaction with Wesfarmers to our shareholders.
‘Kidman’s Focus has been to create value for shareholders through the development of a leading Australia integrated lithium project and we have made significant progress towards achieving this goal.
‘However, the overarching objective of the Kidman Board has always been to act in the best interest of shareholders and maximise shareholder value. After careful consideration of the future development pathway for the Mt Holland Lithium Project, the Kidman Board has concluded unanimously that realisation of a significantly Premium to the undisturbed market value, at a certain cash price, is in the best interest of all our shareholders.’
Kidman Resources’ share price outlook
Kidman resources’ share price has been plagued with volatility, but the thing about volatility is that it isn’t always a bad thing.
Volatility at a time like this, with the company releasing a string of announcements about its deed with Wesfarmers, makes sense.
Kidman’s CEO commented the future of the company, saying:
‘We are extremely proud of the hard work and achievements of all our staff and the significant progress we have made to date in the developing the Mt Holland Lithium Project. This transaction rewards shareholders for this progress while delivering them with certain cash value for their investment in Kidman today.’
Regards,
Ryan Clarkson-Ledward,
For Money Morning
PS: Free investor report reveals the highest potential growth sectors for 2019 and beyond. Download now to find out more (for free).
Related Articles
A Wall of Worry and Other ASX Truths — ASX-listed Gold Stocks
The first leg for gold stocks could be down to a value pivot or correction where existing profits and high-cash balances — there’s some great margins available…
Coles Share Price versus Woolworths Share Price: Which is Better?
Two supermarket heavyweights, Coles Group Ltd [ASX:COL] and Woolworths Group Ltd [ASX:WOW] have avoided massive sell-offs in this downturn. Today we look at the Coles share price in comparison with the Woolworths share price, to see which could be sturdier as the months in self-isolation progress.
Lynas Share Price Down as Wesfarmers Abandons Bid: The Trump Effect
At time of writing, the share price of Lynas Corporation Limited [ASX:LYC] is down a further 4.96%, trading at $2.30. After shooting up towards the end of June, the Lynas share price has fallen sharply in the last two weeks as trade tensions ease (again). You can see the timing of Trump policy…
Lynas’ Share Price Rises 10.95% after Go Ahead from Malaysian PM
Today, Lynas Corporation Ltd [ASX:LYC] is set to reach more multi-year highs, as the Malaysian Prime Minster gave his strongest indication to date that the company will be allowed to continue operating its controversial processing plant.At the time of writing Lynas’ share price is trading at $3.04, up 10.95%.
China Rare Earth Ban Drags Down Wesfarmers Share Price| ASX: WES
This new ban has seen a decline in the Wesfarmers share price, currently at a decrease of 1.22% (trading at $36.88 a share), as it complicates their takeover plans of Lynas Corporation Ltd [ASX:LYC]
Lynas’ Share Price Up Again — Clarification and Trade War Impact
The company has recently come out of a trading halt and provided clarification on its reserves. Meanwhile, there are signs that Lynas could benefit from worsening US–China trade war tensions.