Merger: Yes or No, page-490

Hey @GCar!

I would like to address your question:
¨They are probably reading these threads. Why haven’t they scrambled to the ATO and got a CGT/rollover ruling sorted already?¨

You have been invested in this company long enough to know that your questions is rethorical.

Tell me one time since the days of GMM/GXY where management has actioned anything based on retail shareholder concerns. There were plenty of reasonable concerns.
The list of concerns is longer than the reasons to vote AGAINST this merger (currently at 28 items). But this list is growing by the day (see below)!

What I like AKE management to do is to be honest about this merger. It is a reverse take over where AKE shareholders take most if not all of the risk.

The KROLL reports says it all. In black & white and -more importantly- what is missing or between the lines.

For example, does the KROLL report analyse the management performance of Livent versus AKE?
No it doesn't!

In fact the KROLL report justifies the lack of management analysis with this blunt statement:
As the Transaction does not result in a change of control for Allkem Shareholders, we have assessed whether the Scheme is in the best interests of Allkem Shareholders by considering whether Allkem Shareholders as a whole are, on balance, better off, or at least not worse off, if the Transaction proceeds than if it does not.

Hello people! Do you get the meaning of this?
KROLL reccomends this merger as long as AKE sharehoder are not worse off. That's KROLL's threshold / cut-off!
Why setting the bar so low?
Because this merger sucks and KROLL knows it!

The report is a lot of fluff and thin air blabla with a sprinkle of operational synergies.
KROLL even admits that ¨we note that there are significant risks associated with the realisation of the synergies!¨
Half of the financial benefit of this merger are already spent on management bonuses, transaction fees etc. More cost will incur during the restructuring of operations.

This assessment has been undertaken through evaluation of the advantages and disadvantages of the Transaction. Allkem Shareholders (and Livent Stockholders) are expected to benefit from the synergies generated as a result of combining the two companies, including operating cost synergies (expected full run-rate of $125 million in CY27) and the one-time capex savings of approximately $200 million.

This merger DILUTES AKE's cash by taking on Livent's net debt amount of US $79.9Mil. Yes, Livent is bringing US $80Million in debt before transactions costs to this deal:

Should the Transaction be completed, NewCo will have pro forma cash and cash equivalents of $983.1 million and $517.0 million in pro forma debt as at 30 June 2023.
Allkem’s cash and cash equivalents of $821.4 million
Livent’s cash and cash equivalents of $167.8 million as at 30 June 2023, adjusted for costs relating to the Transaction (refer to Section 7.14 of the Scheme Booklet for further details).
Allkem’s debt of $274.3 million
Livent’s debt of $242.7 million as at 30 June 2023. Both figures exclude lease liabilities and costs related to the Transaction.

And now to my favourite part!
The KROLL report does not analyse how NewCo will be able to fund the development of all current projects!
In fact the KROLL report states between the lines that the cash position after the merger is not sufficient to fund the development of current projects:
Allkem Shareholders will benefit from the higher operating cash flows of the Combined Group (pro forma FY22 Adjusted EBITDA of over $1 billion) to fund future exploration and development, with the ability to accelerate capital projects where it may be value accretive to do so, and which will de-risk the execution of Allkem’s growth strategy compared to a standalone basis.

This is in stark contrast to AKE's statement that funding for the development of AKE's current projects is sufficient!

Unbelievable but true, KROLL goes on to say this:
Allkem faces several major funding commitments in the short-to-medium term relating to its development assets (Sal de Vida, Cauchari and James Bay), as well as committed or potential expansions at its operating assets (Olaroz, Mt Cattlin, and Naraha). These projects will require substantial upfront capital investment. Relative to Allkem, the Combined Group will have increased financial scale and strength, enabling it to develop the projects efficiently and reducing reliance on securing further debt and/or raising capital, which can be costly (and in the case of equity, potentially dilutive) and difficult to secure.

Why didn't KROLL report that AKE is already in the position to fund these projects! AKE reported this on the ASX! WTF?

What does KROLL say about Livent's funding shortfall of US $1.3 BILLION for the development of Livent's current project?
NADA, NICHTS, NOTHING, F@#$ all!
Because Livent does not have the cash or operational income to fund these projects!

But hang on, there is more...(to be continued).

This merger is a reverse take over and cash and asset grab by Livent!

1000% F@#$ this merger!!!