(Bloomberg) — Australian lithium miner Lionstown Resources Ltd. said it was willing to back a new A$6.6 billion ($4.3 billion) takeover bid from Albemarle Corp., the world’s top producer of the battery metal.
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The US-based producer raised its cash offer to A$3 per share, Liontown said on Monday, up from $2.50 per share in March. Western Australia-based Target said it was willing to bid on its latest bid – a 15% premium to Friday’s close – and had given the firm due diligence.
Such a deal would underpin the remarkable growth of Australia’s lithium sector, which has seen a more than tenfold increase in start-up and lesser-known companies. Demand for the metal from car manufacturers is rising amid a transition away from fossil fuels.
The decline comes after lithium prices fell from last year’s record lows and lithium producers’ stock prices fell. Albemarle, which owns lithium mines and a processing plant in Australia, has offered to acquire all of Liontown’s equity for A$2.50 a share, the Perth-based company said in March its third bid in five months.
Read more: Lithium craze sparks 1,100% stock gains and deep losses
Lyontown rejected Albemarle’s approach based on forecasts that global demand for lithium will grow fivefold by 2030 and a projected supply shortage.
The company has one of Australia’s most promising early-stage lithium projects, a world leader in battery metal, and supply agreements with major automakers including Tesla Inc and Ford Motor Co.
(Updates from the first paragraph with Lionstown’s premise accepted)
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