Citi says Liontown bid needs price bump, counter bid likely...

Citi says Liontown bid needs price bump, counter bid likely analysts Kate McCutcheon and Alexander Papaioanou said Liontown Resources was worth $3 a share after Albemarle lobbed a bid for the company. Citi Australia analyst Kate McCutcheon. The broker’s analysis uses a discounted cashflow analysis and US$1000/t spodumene and US$17,500/t hydroxide price that is not prescribing value to its Buldania project. Liontown received a $2.50 per share bid from US commodities giant Albemarle on Tuesday that sent the stock soaring 68 per cent to $2.57.Citi’s new price target on Liontown is $2.80 per share. “We see the offer as bullish for lithium signalling that the largest producer is keen to secure more supply with low jurisdictional risk. [Albemarle] would take on execution risk, upcoming capex commitments, contracted volumes and approvals. With three offers to date and on-market share purchases, a counter bid seems likely,” the broker said. “To get [Liontown’s] board to the negotiating table, we think the offer needs a bump. ALB says it’s all cash; just as well as a scrip deal would be a harder sell.”