(AUSTRALIA) – Liontown Resources, an Australian lithium developer, experienced an 11.5% surge in its shares following the board’s endorsement of a refreshed A$6.6-billion ($4.3-billion) bid from Albemarle Corp, the world’s largest producer of lithium.
The new cash offer of A$3 per share signifies a 14.5% premium over Liontown’s last closing price of A$2.62 on September 1 and is 20% higher than Albemarle’s previous offer of A$2.50 per share in late March, which Liontown had rejected as inadequate.
Albemarle’s enhanced bid indicates confidence in lithium market
This development reflects a growing trend in Australia’s lithium sector, where emerging companies with lower valuations and cash requirements are being targeted for buyouts by major lithium producers keen to secure their supplies.
Albemarle’s increased bid suggests a bullish view on the long-term lithium price or a desire to secure additional supply at a premium.
Liontown’s board intends to unanimously recommend the new offer to shareholders, provided no superior proposal emerges and after an independent expert’s report examines the deal.
Albemarle has been granted exclusive due diligence rights for a limited period and will work on a mutually acceptable scheme implementation deed.
Lithium is in high demand for electric vehicle batteries, and Australian projects have become more attractive than those in other major producers, such as Chile, which announced plans to nationalize its lithium industry in April.
Liontown controls significant lithium deposits in Western Australia and has supply agreements with Ford, Tesla, and LG Chem’s battery unit.
