KEY POINTSAlbemarle has terminated its plans to acquire Liontown...

KEY POINTS

Albemarle has terminated its plans to acquire Liontown Resources, citing "growing complexities" with progressing the transaction

Gina Rinehart has amassed a blocking 19.9% stake in Liontown, raising questions about her intentions for the company

Liontown shares are in a trading halt as the company finalises funding for its Kathleen Valley lithium project

After a year-long pursuit, lithium giant Albemarle has terminated its plans to acquire Liontown Resources (ASX: LTR), citing the “growing complexities” with progressing the transaction.

As for billionaire Gina Rinehart – It’s mission accomplished. And it only cost her a cool $1.3 billion to amass a blocking 19.9% stake in the company.

The withdrawal prompted Liontown shares to enter a trading halt on Monday to “allow for the finalisation of funding associated with the Kathleen Valley Project.”

In this piece – I’ll recap everything you need to know about Liontown now that Albemarle is out of the picture.

The shorters were right

With Liontown shares hovering around $3.00 throughout September and early October, the growing risk of the takeover collapsing due to Rinehart’s controlling stake presented an attractive opportunity for short sellers.

Short interest in Liontown aggressively climbed to 9.9% last week from around 3.0% in August.


Liontown short interest history (Source: Shortman)

Goodbye anchor

Liontown shares have remained resilient amid broader lithium market weakness, hovering around the $3.00 thanks to Albemarle’s takeover offer. However, with the bid withdrawn, the stock now faces significant uncertainty.

Goldman Sachs downgraded the stock on Monday to a Sell rating with a $1.85 target price (from $1.35). The new target price reflects a downside of 33.7% from Friday’s close of $2.79.