, Columnist
A Rare-Earth Steal at a 45% Markup
Wesfarmers’ $1.1 billion offer for Lynas amounts to a cheap call option on the company resolving license issues in Malaysia.
Waste not, want not.
Photographer: Goh Seng Chong/Bloomberg
This article is for subscribers only.
It always pays to read the small print.
On the face of it, Wesfarmers Ltd.’s A$1.5 billion ($1.1 billion) offer for rare-earths producer Lynas Corp. looks outrageously generous. The bid comes at a 45 percent premium to the target’s last close. For most of the past five years, a slump in the rare-earths market and a regulatory tangle in Malaysia, where Lynas processes its Australian-mined ore, has seen it worth less than a third as much.