Here is an updated looooooooong list of disadvantages should the reverse take over of AKE by Livent (merger) go ahead. Points referring to changes in jurisdiction are taken from the Scheme book (Annexure H). Other sources include financial reports etc:
- Evaluation of AKE and conversion ratio is substantially below AKE’s near and long-term value (based on production and sales volume, asset types (spod, brine), location, resource size and integration).
- AKE has 100% ownership of its assets. Livent’s ownership of Whabouchi and Becancour is 50% and Hombre Murto 100%.
- AKE is fully funded to develop its projects (SDV stage 1 US$ 271 Mil, James Bay US$ 285Mil, Cauchari US$ 450 Mil).
- Livent is not fully funded and requires Capex of US$ 447 Mil and US$ 821 Mil for Whabouchi and Becancour development, respectively.
- What are the chances that the merged company (NewCo) will develop all projects? ZERO!!!!
- Which project(s) will be canned or sold off?
- AKE share price has disproportionally tanked when compared to other Li miners (e.g. PLS) due to the proposed merger.
- AKE share price will depreciate further due to sell off of ineligible overseas share holdings by Sale Nominee.
- New CEO is an US ex-merchant banker from Goldman Sachs Group.
- Mediocre track record of Livent management. Worse then AKE’s.
- CDI holders will not have legal title in the underlying NewCo shares.
- CDI holders are not able to vote directly.
- CGT event if not eligible for rollover relief and unsuccessful class ruling by ATO.
- Passing of resolutions requires only 50% (ASX=75% of votes)
- No annual limit for the issue of new shares (ASX=15%)
- Unlikely future dividends and without franking credits
- Removal of directors only for nolo contendere, felony and moral turpitude
- No remuneration limit of directors and officers (currently US$1.5Mil for AKE)
- No shareholder approval needed anymore for payment of termination & retirement benefits.
- No prohibition from NewCo giving a related party a financial benefit.
- Extension of substantial holding notice from 2 to 10 days.
- No Takeover protection by law.
- No limitation on the ability of a person to acquire any number of NewCo CDIs or NewCo Shares.
- NewCo would be exempt from complying with the Australian continuous disclosure regime set out in ASX Listing Rule 3.1.
- Under US law, NewCo is not generally required to publicly disclose material price-sensitive information until the next quarterly report or a specific disclosure requirement arises in respect of the matter.
- NewCo is not required to prepare and lodge annual and half yearly financial statements, Directors’ statement and report.
- AKE is no longer an Australian company!
- ….please add if I missed something!
In my humble opinion, this deal is a pineapple going in the wrong way and carries far too many risks.
Name me one reason why AKE should surrender control and stewardship over its Tier 1 assets?
What is the secret souce Livent has that makes this deal worth the risks?
If the HC board is by any means representative for the general AKE retail shareholder, then this deal is f@#$ed.
Please vote!
Make your AKE holding count one way or the other!
Like so many on this forum, I voted AGAINST, my friends voted AGAINST, my family members voted AGAINST.
F@#$ the merger!
***This is obviously not financial advise and my opinion only***
