The offer was determined by Alpha Lithium’s board to be opportunistic, while presenting a low and declining premium to the company’s trading price on the NEO Exchange
Alpha Lithium is engaged in developing the Tolillar and the Hombre Muerto lithium salars in Argentina. (Credit: dyet on Freeimages)
Alpha Lithium, a Canada-based mineral exploration company, has rejected a takeover bid of around C$241m ($178.3m) from Tecpetrol Investments, a member of Spain-based Techint Group of Companies.
According to Alpha Lithium, the offer is not in the best interests of the company or its shareholders. This was after a review and assessment was done by its board of directors in consultation with its financial and legal advisors.
Furthermore, the offer was determined to be opportunistic, while presenting a low and declining premium to the company’s trading price on the NEO Exchange.
Alpha Lithium also said that the non-binding offer, which is subject to due diligence, included a request for a binding 30-day exclusivity agreement between the parties. Under the agreement, the mineral exploration company cannot engage with interested third parties during the period.
The firm is currently engaged in the development of the Tolillar and the Hombre Muerto lithium salars in Argentina.
Tecpetrol Investments’ offer to Alpha Lithium’s shareholders is C$1.24 ($0.92) per share in cash. The Spanish firm said that its proposal is a premium of 26% over Alpha Lithium’s 20-day volume-weighted average price as of 12 May 2023.
It further stated that its intention behind the offer is to develop the Argentine lithium assets responsibly as part of the integrated Western battery supply chain.
The Spanish firm stated: “Alpha refused to consider Tecpetrol’s proposal and did not engage with Tecpetrol following discussions between advisors.
“Through these exchanges, Tecpetrol indicated an ability to improve the financial terms of its Offer if Alpha would agree to give Tecpetrol access to expedited due diligence so that Tecpetrol could determine an appropriate increase in price based on its findings.”
In late 2021, Russia’s Rosatom announced that through one of its subsidiaries, it will partner with Alpha Lithium for developing the Tolillar lithium deposit.
Source: Company Press Release