<article>Australian retail conglomerate Wesfarmers Ltd on Thursday offered A$776 million ($544 million) to buy lithium miner Kidman Resources Ltd , its second bid in two months to win exposure to materials used in high-tech.</article>

Australian retail conglomerate Wesfarmers Ltd on Thursday offered A$776 million ($544 million) to buy lithium miner Kidman Resources Ltd , its second bid in two months to win exposure to materials used in high-tech.
The offer, which has the backing of Kidman&#8217;s board and major shareholders, was pitched at a 47 percent premium to Kidman&#8217;s last closing price and the stock soared to just below the A$1.90 offer price at the start of trade.
It comes as Wesfarmers, which last year spun off supermarket group Coles and sold down its coal assets, seeks to diversify away from retail as a housing downturn weighs on spending and is seen hitting its successful hardware business.
Wesfarmers is also doubling down on a push into the chemical processing of minerals used in everything from electric cars to wind turbines, following a A$1.5 billion bid in March for rare-earth miner Lynas Corp Ltd.
&#8220;In addition to benefiting from the global uptake of electric vehicles, we expect battery-grade lithium hydroxide to play an important role in the electric vehicle supply chain,&#8221; said Wesfarmers Managing Director Rob Scott.
He said the bid was &#8220;very much independent&#8221; from its Lynas offer, which Lynas has so far rejected, but told analysts on a conference call that the firm could manage both within its existing balance sheet capabilities.
Wesfarmers shares edged 0.5 percent lower, in line with the broader market in early trade, although shareholders welcomed the potential deal. Kidman shares traded at A$1.83, a 10-month high.
&#8220;Once again Wesfarmers are at the front of the curve as it deploys its funds from the sale of coal assets and grocery business into the new frontier of electric vehicles,&#8221; said James McGlew, executive director of corporate stockbroking at Perth broker Argonaut and a Wesfarmers shareholder.
&#8220;We have had a valuation of A$2 for some time so A$1.90 is just about on the mark.&#8221;
Kidman&#8217;s major asset is a 50 percent interest in the Mt Holland lithium project based in Western Australia, a joint venture with Chile&#8217;s Sociedad Quimicay Minera de Chile S.A. (SQM). It signed a deal to supply Tesla in May for when its mining operations are up and running in 2021.
Shares under the control of the directors and management of Kidman, about 17 percent of the total, intend to vote in favour of the proposal, Kidman said in a statement.
&#8220;It is in the best interests of Kidman shareholders to engage further with Wesfarmers,&#8221; the company said in a statement. SQM has indicated its support for the deal, Wesfarmers said.
Reuters

Wesfarmers, which last year spun off supermarket group Coles and sold down its coal assets, is seeking to diversify away from retail.

Australia's Wesfarmers mounts $544m bid for lithium miner Kidman

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Australia's Wesfarmers mounts $544m bid for lithium miner Kidman

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