The plan to create the world’s third-largest lithium producer by volume had looked on track this month when proxy advisers Glass Lewis and ISS told clientsto support the transaction on December 19.
Early voting intentions are believed to suggest the deal will successfully achieve the 75 per cent approval threshold required, according to sources close to the process.
Hey Peter, what about the 50% shareholder rule????
Allkem chairman Peter Coleman quipped on the sidelines of the Melbourne Mining Club on December 7 that he was having no trouble sleeping; a veiled reference to the merger being on track to achieve sufficient proxy support.
The California State Teachers Retirement System (CalSTRS) owns shares in Allkem and Livent and gave the deal a boost by confirming it would vote in favour at meetings of both companies’ shareholders on Tuesday.
But support for the deal is not unanimous – Ausbil is expected to vote more than 3 per cent of Allkem shares against the merger, and AustralianSuper is also expected to vote against the deal.
AustralianSuper controlled 7.4 per cent of Allkem’s predecessor Orocobre in August 2021, but that stake was reduced to about 4 per cent when Orocobre merged with Galaxy Resources to create the modern Allkem.
It is believed AustralianSuper’s stake in Allkem is now below 1 per cent, meaning its reluctance to support the deal will not have a major influence on the final voting outcome.
Hey Peter, it might be 1% of shares but 1000s of holders! The 50% rule!
Opponents of the deal have argued that Allkem shareholders should emerge with more than the expected 56 per cent of the merged group, which will be called Arcadium Lithium.
WA’s Mt Cattlin lithium mine is the only Australian asset bound for the enlarged Arcadium, but Allkem also has a substantial package of exploration tenements near Kambalda, which largely surround the Bald Hill lithium mine run by Mineral Resources.
Prices for the lithium-rich spodumene concentrate produced by Mt Cattlin have slumped from close to $US8000 ($11,944) a tonne in January to about $US1600 a tonne this month.
The federal Department of Industry predicted lithium prices would recover to average $US2300 a tonne in 2024 and $US2200 in 2025.
