Andrew 'Twiggy' Forrest is known for his foray into ASX-listed investments. On Friday afternoon, the Fortescue Metals Group Limited (ASX: FMG) chair added another S&P/ASX All Ords Index (ASX: XAO) member to his list of holdings.
This time around — instead of dairy products, seafood, or boots — Twiggy is tipping his fortunes into rare earths. These are the metals used to create the magnets used in the motors of electric vehicles and wind turbines.
Which ASX All Ords share is it?
The ASX company in question is Hastings Technology Metals Ltd (ASX: HAS). After returning from a trading halt, shares on Friday surged 15% to $4.94 apiece — a pleasing sight for shareholders.
According to the release, the rare earths explorer has entered into a binding share purchase agreement to acquire part of Neo Performance Materials Inc. Notably, Neo is the owner of the only commercially operational rare earth separation facility in Europe.
The deal will see Hastings grab 8,974,127 shares in the Canadian-listed Neo at a total value of $150 million. This will mean the ASX All Ords share will own 22.1% of the total shares on issue in Neo following the acquisition.
So, you might be thinking: where does Twiggy come into the picture? Well, as part of the announcement, Hasting revealed a $150 million investment from Wyloo Metals, which is part of Forrest's investment holding company, Tattarang.
The rationale behind Hasting taking a stake in Neo is to potentially create a vertically integrated rare earths company. As the ASX-listed company puts it, a 'mine-to-magnet' value chain. Furthermore, this is in anticipation of Europe becoming a major hub of electric vehicle production in the future.
The deal for Twiggy
Regarding the $150 million investment from Wyloo Metals, here are the important details:
- The investment is for $150 million in exchangeable notes
- Term is over three years
- Convertible for Hastings shares at $5.50 apiece
- Wyloo is entitled to nominate a director to the Hastings board
Coincidentally, the news breaks on the same day that Lynas Rare Earths Ltd (ASX: LYC) revealed record results.
The Hastings share price has outperformed the ASX All Ords over the past year. On Friday afternoon, the company's shares are 23.5% above where they were a year ago. Meanwhile, the All Ordinaries is down 5.3% over the same timeframe.
