Australian lithium developer Liontown’s board favors Albemarle’s $4.3 billion offer

Shares of Australia’s Liontown Resources have surged 11.5% after the lithium developer’s board endorsed a renewed AUD 6.6 billion ($4.3 billion) bid from Albemarle Corp, the world’s largest producer of the battery material. Emerging Australian lithium companies have been attracting buyouts as their lower valuations and cash requirements entice top lithium producers and others looking to secure supplies.

The new cash offer of AUD 3 per share represents a premium of 14.5% to Liontown’s last close on September 1 and is 20% higher than Albemarle’s offer of AUD 2.50 per share made in late March, which Liontown had rejected as too low.

Liontown’s board intends to unanimously recommend shareholders vote in favor of the new offer, provided there is no superior proposal and following an independent expert’s report to assess the deal.

Lithium is in high demand for electric vehicle batteries, and Australian projects have become more appealing than those in other major producer Chile, which unveiled a plan to nationalize its industry in April.

Liontown controls two significant lithium deposits in Western Australia, with first production scheduled for mid-2024 from its flagship Kathleen Valley project, one of the world’s largest and highest-grade hard rock lithium deposits. Liontown also has supply agreements with Ford Motor, Tesla, and the battery unit of South Korea’s LG Chem.

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