- Liontown Resources (LTR) shares are soaring on Tuesday after it rejected a $5.5 billion takeover offer from Albemarle
- The proposal, received yesterday, was to acquire all LTR shares for $2.50 each, and it follows previously rejected offers from Albermarle of $2.35 and $2.20 per share
- Liontown says the new offer “significantly undervalues” the company given its recent efforts at Kathleen Valley and the near-term outlook for lithium producers
- The company urges its shareholders to take no action and maintains that the offer is not in their best interests
- LTR shares are up more than 58 per cent today and trading at $2.42 at 12:36 pm AEDT
Liontown Resources (LTR) shares are soaring on Tuesday after the company announced it had rejected a $5.5 billion takeover offer from Albemarle.
The company said it received an unsolicited, conditional and non-binding indicative proposal from Albemarle on Monday to acquire all LTR shares for $2.50 each.
Liontown said that after careful consideration, it decided the proposal “substantially undervalues” the company and that it was not in the best interest of its shareholders.
The latest offer follows the rejection of previous non-binding indicative proposals received from Albemarle at $2.35 per share on March 3 2023 and $2.20 per share on October 20 2022.
In its decision, Liontown noted the opportunistic timing of Albemarle’s proposal, coinciding with the recent performance of the lithium sector and the pre-production status of the Kathleen Valley project.
The company stated the proposal did not reflect the “significant de-risking” at Kathleen Valley in recent times, as well as the significant growth opportunity at the project in Western Australia.
Liontown also highlighted the scarcity of such a project, as well as the positive near-term outlook for lithium producers and the significant synergies that would become available to Albemarle if it acquired the company, given its existing operations in Australia.
Australia is considered one of the leading nations in lithium production alongside Chile and China.
Liontown noted that Albermarle subsidiary RT Lithium has been building a stake in Liontown through on-market purchases, currently holding around 2.2 per cent of LTR shares issued.
LTR shares were up more than 58 per cent today and trading at $2.42 at 12:36 pm AEDT.