(Reuters) – Australian lithium developer Lionstown Resources said on Monday its board had submitted an improved takeover proposal to Albemarle Corp, the world’s largest lithium producer.
The new cash offer price of A$3 per share represents a 14.5% premium to Lionstown’s last closing price of A$2.62 on September 1 and is 20% higher than Albemarle’s rejection of Albemarle’s A$2.50 per share offer target at the end of March. Very low.
Leontown said the board’s intent is to unanimously recommend that shareholders support the new takeover proposal, and an independent expert has concluded that it is in the best interest of shareholders.
The company will allow Albemarle to take special precautions for a period of time and enter into a mutually acceptable plan implementation document, the company said in a statement.
Australian lithium companies are seeing a surge in buying as their low valuations and financial need attract some suitors who are scrambling to produce some battery materials and other supplies.
Liontown controls two major lithium deposits in Western Australia, including the flagship Katlin Valley project, which is slated for first production in mid-2024, and is the world’s largest and most advanced hard rock lithium deposit.
Albemarle’s latest offer was Liontown’s fourth, following its offer of $2.20 a share on October 20 last year and $2.35 a share earlier in March before the A$2.50 a share offer was announced.
Liontown said Greenhill and UBS will act as financial advisors and Allens will act as its legal advisor in connection with the revised proposal.
($1 = 1.5504 Australian dollars)
(Reporting by Poonam Behura; Editing by Kim Coghill, Christian Schmolger and Jamie Fried)