Azure Minerals Ltd (ASX: AZS) shares have been in focus this week.
That's because the lithium developer received and accepted a takeover offer from Sociedad Química y Minera de Chile S.A. (NYSE: SQM) and Gina Rinehart's Hancock Prospecting.
The two miners joined forces to table a $3.70 cash per share offer, which the Azure Minerals board unanimously recommends in the absence of a superior proposal and subject to the independent expert's report.
However, two interesting things have happened since then.
The first is that Azure Minerals shares are now trading at $3.74, which is ahead of the takeover offer.
This is unusual because shares tend to trade at a discount to the offer to reflect the potential for a takeover to fail. So, for them to be trading ahead of the offer, is even more unusual.
Short interest in the lithium developer was extremely low. So, this isn't attributable to short sellers buying shares to close positions. Could someone be building a blocking stake?
What's going on with Azure Minerals shares?
This brings us to the second interesting thing that has happened since the takeover offer was tabled.
As shareholders will be aware, Mineral Resources Ltd (ASX: MIN) also bought up a sizeable number of Azure Minerals shares recently.
Many believed that it would team up with Rinehart and/or SQM to be part of a takeover deal, but it was nowhere to be seen. Not has it endorsed the offer like other large shareholders.
Bell Potter noticed this and also highlights that Mineral Resources has spoken very positively about Azure Minerals' Andover Project.
And while it suspects the SQM-Rinehart takeover deal will be successful, it notes that Mineral Resources could look to use its holding to vote it down. The broker said:
In relation to the Andover Project (AZS, 60%), Managing Director, Mr Chris Ellison recently noted (2023 AGM, November) that MIN considers the deposits to have attractive characteristics, to have substantial Resource potential, and, that MIN wants to own a stake in the project.
In our view, the most likely outcome for AZS is that that the new joint proposed transaction will be successful. However, given MIN's recent comments on the Andover Project (AZS, 60%), and it's current substantial holding (~21% of the scheme voting shares), it is possible MIN could seek to vote down the scheme of arrangement, and maintain its ownership in AZS.
