Hastings intends to fund the acquisition through a A$150m ($103m) cornerstone investment by Wyloo Metals, in the form of secured, redeemable, exchangeable notes, which are exchangeable into Hastings ordinary shares
Australian rare earths developer Hastings Technology Metals is set to acquire a 22.1% stake in Neo Performance Materials, a global rare earth processing and permanent magnets producer.
The company has entered into a binding share purchase agreement with an affiliate of Oaktree Capital Management to acquire more than 8.9 million shares of Neo Performance.
Under the terms of the acquisition, the company will purchase the shares at a price of C$15 ($10.3) per Neo share, for a total of C$135m ($92).
The offer price represented a 4.7% premium to Neo’s closing price on August 24, and a 2.8% premium to its ten-day volume weighted average share price.
Hastings executive chairman Charles Lew said: “The acquisition of the Neo stake represents an important strategic milestone for Hastings, providing the Company and its shareholders with a unique opportunity to take further steps towards realising the Hastings 2.0 strategy.
“We are also thrilled to welcome the support of and strategic investment by Wyloo Metals. We see Wyloo’s commitment to Hastings as an important validation of our strategy and objectives.
“Importantly for Hastings shareholders, in addition to these important strategic initiatives, we continue to remain focused on the development and funding of Yangibana, and the company continues to advance its plans in this regard.”
Hastings intends to fund the acquisition through a A$150m ($103m) cornerstone investment by Wyloo Metals, in the form of secured, redeemable, exchangeable notes.
The notes are valid until three years and are exchangeable into Hastings ordinary shares at an exchange price of $5.50 per share, at any time after 60 days.
In addition, Wyloo holds the right to appoint a nominee director to the Board of Hastings and retain that nominee while Wyloo’s equity interest in Hastings is 12.5% or above.
Wyloo Metals CEO Luca Giacovazzi said: “The investment fit well with the company’s long-term strategy to invest in the critical minerals that support renewable energy generation and electrification.
“Rare earths and the permanent magnets they produce are essential enablers of the energy transition. There is already a shortage of these products, and the upcoming increase in magnet demand will require continued investment.
“Wyloo is delighted to be partnering with Hastings as a cornerstone investor and we look forward to joining the Board and working alongside the company as it delivers upon its strategy.”
Last week, Neo has executed a binding agreement with Hudson Resources to acquire the latter’s exploration license for the Sarfartoq carbonatite complex in Greenland.