ALB - Liontown ASX share price skyrockets on new Albemarle takeover offer in all-cash deal

2023-03-28 01:49:26 ET

• On Tuesday, Liontown Resources ( OTCPK:LINRF ) ASX shares jumped 68.5% to $2.57 after Albemarle ( NYSE: ALB ) made an unsolicited, conditional, and non-binding indicative proposal to acquire all of the shares in Liontown at a price of A$2.50 or US$1.66 per share in cash, which values Liontown at A$5.2 or US$3.4 billion on an enterprise basis via a scheme of arrangement.
• Earlier on Monday, Liontown Resources ( OTCPK:LINRF ) revealed that it has received and rejected a takeover approach from lithium giant Albemarle ( ALB ).
• In coming to its decision, the Liontown board noted the opportunistic timing of Albemarle’s Indicative Proposal, coinciding with recent softness in companies exposed to the lithium sector and the pre-production status of the Kathleen Valley Project.
• The offer was subject to a number of conditions before it would become binding, which includes Liontown providing exclusive due diligence, the Liontown board unanimously recommending the proposal, regulatory approvals, and entry into a mutually acceptable scheme implementation deed.
• With the move, Albemarle believes that this offering will increase liquidity and accelerate the realization of increased value for Liontown stockholders.
• Pro forma for this potential transaction Albemarle will maintain a strong balance sheet and an expected net leverage of approximately 1.5x.
• In the past, Albemarle had two other proposals rejected by Liontown. The first was for $2.20 per share in October and the second was earlier this month on 3 March for $2.35 per share.
• Now read: Albemarle ( ALB ) is "poised for rapid long-term expansion thanks to the rising demand for lithium to power EVs and charging stations," Yannick Frey writes in an analysis posted recently on Seeking Alpha .

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