Are you guys aware that Citi think Rio are looking at doing a...

Are you guys aware that Citi think Rio are looking at doing a deal with Arcadium ? I bring it up as a previous holder of LTM and as a holder generally in lithium stocks. Report courtesy of AFR today.

Citi suggests Rio Tinto could buy Arcadium Lithium

Tom Richardson

Share post

Broker Citi has suggested Rio Tinto could make a splash in the lithium space by acquiring ASX-listed Arcadium Lithium at around a 30 per cent premium to its current $5.5 billion valuation.

“For Rio we highlight buying LTM [Arcadium Lithium] could be a more economical option than developing its own lithium assets,” said Citi.

“On our scenario modelling, acquiring LTM at a 30 per cent premium would achieve a ~16.4 per cent IRR [internal rate of return] – a superior investment option to Jadar with a ~12 per cent IRR.”

Shares in Arcadium Lithium have collapsed in half over the past year to track lithium prices lower. They last fetched $5.06.