PETALING JAYA: An Australian conglomerate, Wesfarmers, is reported to have dropped a takeover bid for the controversial rare earths mineral producer Lynas Corporation, according to a news report.
The Australian newspaper, quoting sources, said Wesfarmers had walked away from the deal, although the company had indicated it remains a suitor.
News of the Wesfarmers decision comes a week after Prime Minister Dr Mahathir Mohamad hinted that Lynas would be able to continue operating its controversial processing plant in Kuantan beyond the expiry of its licence in September.
In March, Wesfarmers had made a hostile bid, offering A$2.25 per share for Lynas, subject to renewal of the Lynas licence. The deal was worth A$1.5 billion (RM4.4 billion). The Lynas board had rebuffed the offer.
Since Mahathir’s announcement, Lynas share prices have soared in Australia, closing at A$3.05 on Friday, way above the Wesfarmers offer.
Also helping the share price higher was the chance that China would cut off its exports of rare earths to the US amid rising trade tensions between the two, the report said.
Besides the Lynas bid, Wesfarmers had also approached the Malaysian government about solutions for disposing of waste at the plant by transporting it to Australia, and made an attempt to buy another rare earths producer, Kidman Resources, for A$776 million, the report said.