For the shortterm LIT are not going to dump. This was released last Friday so it should come under Truth in Takeover provisions. He however has not ruled out mounting another takeover bid in the future. So I will mount a stage 2 program.
Lithium Australia backs down on takeover bid for Lepidico
by Angie East
Lithium Australia NL has decided to drop its hostile takeover play for fellow ASX-listed lithium junior Lepidico Ltd., announcing June 15 that it will not extend its offer past the latest deadline of June 19. The company had a prebid position of 17.87% secured through agreements with Parkway Minerals NL, which was previously known as Potash West and was an initial seed investor in Lepidico. Lithium Australia also received acceptances from about 0.5% of minority shareholders, which took its total shareholding to 18.02%. However, Lepidico conducted an entitlement offer, which diluted Lithium Australia’s stake to 15.79%, making it the second-largest shareholder. The company applied to the Australian Securities and Investments Commission to have its takeover bid include the newly issued entitlement shares, but the move was rejected by the regulator. Lepidico Managing Director Joe Walsh told S&P Global Market Intelligence that while it is “business as usual” at Lepidico, this appears to be a “disastrous outcome” for Lithium Australia.
“They’ve received acceptances for around 0.5% of minority shareholders, which is extremely low and shows that the vast majority of Lepidico shareholders had no interest in their offer,” he said. “Furthermore, since they announced their intention of making the offer, their share price has more or less halved. That’s a huge indictment of their own shareholders’ view of this.” Since Lithium Australia announced its takeover plans in early February, its share price has slipped to 9.3 Australian cents, from about 18.5 cents. Meanwhile, Lepidico’s share price gained 58.3% shortly after the announcement and is now trading about 16.7% higher, at 1.4 cents.
“I think what happens invariably in these situations is the price of the bidding vehicle goes down, the price of the target vehicle goes up in anticipation of getting a better offer and we weren’t prepared to change the offer,” Lithium Australia Managing Director Adrian Griffin said in an interview. However, the executive said the company is happy with the shareholding it has attained in Lepidico and plans to keep it. “We had that date set, to a large extent we have the stock that we want, so there’s no point in extending it any further,” he said. Griffin declined to comment on whether Lithium Australia may take another crack at Lepidico down the line. Lepidico, meanwhile, anticipates that it will be able to deliver a maiden resource for its Alvarroes lepidolite mine in Portugal and could also potentially have another lithium resource at the Pioneer Dome project in Western Australia in the September quarter. The company has an agreement with Pioneer Resources Ltd. to earn up to a 75% stake in a lepidolite prospect within the Pioneer Dome project.
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