Ann: Revised Proposal from Albemarle, page-646

I'm surprised the board recommended a $3 bid. It sounded to me from their earlier comments that they were not selling at any price. I'd have thought something like $5 based on that would be what the were looking for.
On the ither hand:
A FCF of $2.5bn with 500 000t production implies a required profit of A$5000/t.
With current spodumene prices around US$3000(landed price), that is just not possible.
With underground mining it will be more expensive than open pit(PLS). Costs, royalties and taxes(eventually) will slice that FCF to closer to $1bn at the moment. That just means there is still reasonable value in it even at $3.
On the other hand there is execution risk. Just look at CXO. Up to $1.88, now down to 40c. Comment on PLS's history also that it is not easy to get spodumene production right. Maybe that makes the $3 bid a 505/50 call. I'm still surprised though that the board would recommend this as they seemed pretty optimistic just a couple of months ago that prior offers seriously undervalued LTR.