Wesfarmers dropped 0.28 in the ASX today after releasing to shareholders a proposal outline to purchase Kidman Resources. The report detailed a $776 million proposal to buy out 100 of Kidman shares at $1.90 a share.
The intended purchase comes as a projected investment in the growing electric car industry. Kidman Resources is a tier-one lithium developer, crucial to the sustainability for electric cars.
Kidman Resources boosted a 44.6 per cent in the ASX today, finishing today’s shares at $1.87 a piece. The announcement today follows Wesfarmers’ bid earlier in the year to purchase rare earth miners Lynas for $1.5 billion.
Wesfarmers CEO Rob Scott says the new proposal will not replace the Lynas bid and has visions of owning both companies as a strong possibility.
“We see Kidman and Lynas as two very independent opportunities, separate opportunities and we’ll consider each separately…Our initial work analysing opportunities in the lithium space goes back many years,” ob said.
“We remain open to engaging with the board of Lynas. We have high regard for the management of Lynas and their capabilities, and if both opportunities were to go ahead we would be drawing very heavily on the expertise and the capabilities of the Lynas team,” Rob said.
The company outlined a method of debt facilities to fund the Kidman purchase. The release outlined that debt will not affect the company’s credit rating.
Notable groups under the Wesfarmer’s ownership include Bunnings Warehouse, Kmart, Target, Officeworks, Kleenheat, Coles and Flybuys.
Wesfarmers’ share prices saw a wild trajectory today, opening at $35.58, peaking at $35.72 and dropping and climbing to finish at $35.69 a piece. The market cap remains at $40.82 billion.