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March 27 (Reuters) - Australia's Lynas Corp Ltd on Wednesday said it would not engage with conglomerate Wesfarmers on its "highly conditional" $1.1 billion takeover approach for the only proven producer of rare earth elements outside China.
The rejection came a day after Wesfarmers launched a bid of A$2.25 per Lynas share, which represented a near 45 percent premium to the rare earths miner's Monday's close.
Lynas shares closed 35.1 percent higher on Tuesday, falling short of the offer price.
The Lynas board "will not engage with Wesfarmers on the terms outlined in the indicative and highly conditional proposal," the company said in a statement.
Flush from asset sales and the spin-off of supermarket chain Coles Group, Wesfarmers had made a surprise move for Lynas in a bid to acquire new growth areas.
However, the bid failed to appease shareholders of the retail-to-chemicals conglomerate who dumped the company's stock in Tuesday's session on concerns around Lynas' processing plant in Malaysia.
Lynas, which has a mine in Western Australia and an $800 million processing plant in Malaysia, is facing problems getting licence renewals for the plant due to concerns over waste storage.
Analysts have also viewed the buyout offer as being too low, adding that rival bids might emerge from Japanese or international trading houses given Lynas' role in a niche commodity market.
(Reporting by Aditya Soni in Bengaluru Editing by Tom Brown and Chris Reese)