Allkem General Discussion, page-3633

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butcherboy

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12/05/23

11:48

Post #: 67741058
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Originally posted by PatienceToWin: ↑

View attachment 5273152

Allkem announced after market close on Wednesday its intention to merge with chemical manufacturer Livent. The merger will be by way of an issuance of new shares to the shareholders of each company in a new yet to be named company (NewCo).
The transaction ratio will see Allkem shareholders receive one (1) right to a share in NewCo for each existing Allkem share. Livent shareholders will receive 2.406 NewCo shares for each Livent share held. The ownership structure of NewCo will be circa 56% by Allkem shareholders and 44% Livent shareholders. On current market values NewCo will carry a market value of circa A$11.5 billion.
The merger will be subject to shareholder approvals from both companies and other statutory approvals. The merger is expected to complete by calendar year-end 2023. We have no concern over the CDI listing on the Australian Stock Exchange, post completion of the merger.
We are positive around the benefits each company brings to the table and are comfortable at this early stage with the dilution of ownership to Allkem shareholders as a result of the merger.

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Current PLS market cap is $14.331B AUD (from CommSec, not fully diluted).

Current AKE market cap is $9.527B and current Livent market cap is $4.602B USD = $6.87B AUD.

Current combined NewCo market cap = $16.44B AUD.

With the forecast attributable lithium production capacity (see below, 52% more than PLS) and the increased global diversification and integration, there is still plenty of room for NewCo share price growth ahead I would say.

AKE Price at posting: $15.04 Sentiment: Buy Disclosure: Held
29 Upvote

4 Great analysis

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Allkem General Discussion, page-3633

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