Wesfarmers Ltd (ASX: WES) has come a step closer to acquiring lithium miner Kidman Resources Ltd (ASX: KDR) this morning after announcing that the two parties have entered into a scheme implementation deed.
According to the release, the scheme implementation deed confirms the terms of Wesfarmers' proposal announced on May 2 to acquire 100% of the outstanding shares in Kidman for $1.90 cash per share by way of a scheme of arrangement.
This follows the completion of Wesfarmers' due diligence and the satisfaction of conditions to the process and exclusivity deed with Kidman.
The good news for Wesfarmers is that the takeover approach has the support of the Kidman board and some of its major shareholders.
The release explains that the Kidman board has unanimously recommended that shareholders vote in favour of the scheme in the absence of a superior proposal and subject to an independent expert concluding that it is in their best interests.
This view has been echoed by a number of the lithium miner's major shareholders which, combined with the board and key members of its management team, own approximately 17% of the company's outstanding shares.
Wesfarmers' managing director, Rob Scott, appeared pleased with how things were developing.
He said: "This is an important milestone in advancing a transaction that provides Wesfarmers with an attractive investment and delivers Kidman shareholders with a compelling premium and certain cash return."
Sociedad Química y Minera de Chile deed signed.
In addition to the above, Wesfarmers advised that it has entered into a commitment deed with Sociedad Química y Minera de Chile S.A. (SQM) in relation to its Mt Holland lithium project joint venture agreement with Kidman.
The commitment deed between Wesfarmers and SQM sets out agreed amendments that will become binding if it completes the acquisition of Kidman.
The amendments relate to a number of commercial and technical matters and will support the successful development of the Mt Holland lithium project by Wesfarmers and SQM.
SQM has also agreed not to enter into discussions with any party proposing to make an alternative offer for Kidman.
This news hasn't been enough to lift the rest of the industry. Lithium miners Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE) have both fallen heavily today.
