Following completion of the exclusive period of due diligence to acquire Kidman, Wesfarmers has entered into a Scheme Implementation Deed (SID) to complete the proposed deal.


Image: Following the execution of the scheme, all shareholders of Kidman are expected to receive $1.90 cash per share. Photo: Courtesy of rawpixel from Pixabay.

Australian company Kidman Resources has entered into a Scheme Implementation Deed (SID) with Wesfarmers under which its subsidiary Wesfarmers Lithium will acquire Kidman.

On 2 May 2019, Wesfarmers announced a proposal to acquire Kidman and following the completion of its exclusive period of due diligence and the satisfaction of conditions to the acquisition of the process, both companies have entered into the SID.

Through the SID, Wesfarmers will acquire 100% of the ordinary shares in Kidman for a cash consideration of $1.90 per share by way of a scheme of arrangement

Following the execution of the scheme, all shareholders of Kidman are expected to receive $1.90 cash per share, which values the equity of Kidman at approximately $776m.

The Kidman board has unanimously suggested that Kidman shareholders vote in favour of the SID in the absence of a better proposal, concluding that the scheme is in the best interests of Kidman shareholders.

Kidman said that the scheme is subject to customary conditions, including Kidman shareholder approval, court approval, no material adverse change and no prescribed occurrences, and all warranties being true and correct in all material respects.

Kidman CEO Martin Donohue said: “We are extremely proud of the hard work and achievements of all our staff and the significant progress we have made to date in developing the Mt Holland Lithium Project. This transaction rewards shareholders for this progress while delivering them with certain cash value for their investment in Kidman today.”

Wesfarmers said that the execution of the SID with Kidman demonstrated significant progress towards the proposed acquisition of Kidman.

Kidman said that Wesfarmers has worked with its management teams, Mt Holland lithium project joint venture, and Covalent Lithium, since three weeks to complete its confirmatory due diligence.

Wesfarmers managing director Rob Scott said: “This is an important milestone in advancing a transaction that provides Wesfarmers with an attractive investment and delivers Kidman shareholders with a compelling premium and certain cash return.”