Albemarle has indicated that the revised proposal provides an immediate premium for Liontown Resources' shareholders and foresees significant value enhancement for its own stakeholders
Albemarle offers a fresh bid of $4.3bn for the takeover of Liontown Resources. (Credit: Jonny Caspari on Unsplash)
Liontown Resources said that its board has unanimously recommended Albemarle’s revised bid of A$3 ($1.94) per share, which values the former at A$6.6bn ($4.3bn) on an equity value basis.
Albemarle, which is an American speciality chemicals manufacturing company, has confirmed the submission of its best and final non-binding proposal in the absence of a superior offer.
Liontown Resources stated: “The Revised Indicative Proposal is subject to several conditions before it would be binding, including due diligence to the satisfaction of Albemarle; the Liontown Board unanimously recommending the proposal; and entry into a mutually acceptable scheme implementation deed.”
Based in Australia, Liontown Resources is an emerging Tier-1 battery minerals producer. It is currently listed on the Australian Securities Exchange (ASX).
As of now, the company controls two significant lithium deposits in Western Australia and intends to broaden its portfolio by engaging in exploration, forming partnerships, and pursuing acquisitions.
In March 2023, the Australian battery metals explorer rejected Albemarle’s bid of A$2.5 ($1.62) per share. The offer was turned down by Liontown Resources, citing that it considerably undervalues its business and hence is not in the best interests of shareholders.
Albemarle stated that the updated proposal offers an immediate premium for Liontown Resources’ investors and anticipates substantial value enhancement for the former’s shareholders.
The transaction is said to align with Albemarle’s long-term growth strategy, as well as its stated approach to mergers and acquisitions, marked by disciplined capital allocation and a focus on risk-adjusted value accretion.
Moreover, subject to successful due diligence and the negotiation of a binding scheme implementation agreement, Albemarle expects that the proposed transaction will bolster the scale of its energy storage business and further expand its resource foundation.
The deal will also expand Albemarle’s position in Australia, where it is involved in spodumene resources and lithium conversion facilities at Greenbushes and Wodgina and Kemerton, respectively.