Wesfarmers makes $1.5bn move for Lynas

Retail conglomerate Wesfarmers has made $1.5bn offer for rare earths miner Lynas Corp.

Wesfarmers MD Rob Scott says buying Lynas would leverage his company's assets and capabilities. (AAP)

Wesfarmers is looking to splash some of its Coles cash after making a $1.5 billion offer for rare earths miner Lynas Corp.

The $2.25-per-share all-cash offer represents a 44.7 per cent premium to Lynas' share price before the start of trade on Tuesday.

Wesfarmers had been looking for acquisitions after the demerger and IPO of supermarket Coles in November, as well as the the sale of the Bengalla coal mine, Kmart Tyre and Auto Service, and Quadrant Energy.

Managing director Rob Scott said an investment in Lynas would leverage Wesfarmers' assets and capabilities, including in chemical processing.

"We also acknowledge the importance of the Lynas Advanced Materials Plant in Malaysia and the strong contribution made by Lynas' management team and its employees across all operations," he said.

Lynas jumped 31.8 per cent to $2.05 by 1335 AEDT after coming out of a trading halt.

They had closed Monday at $1.555, down from last May's five-year high of $2.76.

Wesfarmers shares slipped 3.17 per cent to $33.92, dipping back below the $34.01 price shortly before the Coles demerger in November.

Wesfarmers, which owns hardware empire Bunnings, said any deal for Lynas would be contingent on a number of factors, including whether the miner's licences in Malaysia will remain in force for long enough after the acquisition.

In December, Lynas' chief executive Amanda Lacaze said uncertainties surrounding its $800 million plant in Malaysia had hampered efforts to plan expansion.

Lynas is the only major rare earth elements miner outside China.