Australia's Azure Minerals said it rejected a buyout bid from Sociedad Química y Minera de Chile (SQM) valuing the lithium developer at A$901.4 million ($584.74 million), sending its shares more than 12 percent higher.

Azure, which owns around a 60 percent stake in the highly prospective Andover lithium project in Western Australia's Pilbara region, said it decided to reject the offer in light of the increasing potential of the project.

Shares of the Australian company jumped as much as 12.4 percent to A$2.63, as of 0111 GMT, while the benchmark stock index was up 0.3 percent.

Chile's SQM, which is partnering with Australian firm Wesfarmers to build the A$1.9 billion Mt Holland lithium hydroxide project in Western Australia, acquired a 19.99 percent stake in Azure for A$20 million in March.

Azure also flagged that the offer price of A$2.31 per share received from the world's second-biggest lithium chemicals maker was lower than its Aug. 8 intraday high of A$2.96.

The company said the takeover approaches from SQM were non-binding and carried various conditions, including due diligence and Foreign Investment Review Board approval.

SQM, whose biggest shareholder is China's Tianqi Lithium Corp, did not immediately respond to a Reuters' request for comment.
"Azure determined that the approaches did not warrant further engagement by the company and no further discussions have occurred," the Australian company said in response to recent media speculation. 

($1 = 1.5415 Australian dollars) (Reporting by Rishav Chatterjee in Bengaluru; Additional reporting by Melanie Burton in Melbourne; Editing by Subhranshu Sahu)

Photo credit: Azure Minerals Ltd.