Albemarle Liquidates Stake In Liontown Following Failed Takeover Bid

Author: Stjepan Kalinic | January 17, 2024 03:21pm

Global lithium operator Albemarle (NYSE:ALB) divested its 4% stake in Liontown Resources following a failed takeover bid.

Per Financial Review’s report, JPMorgan‘s equity capital markets team offloaded $120 million worth of Liontown’s stock at floor prices, with shares dropping 1.45% and closing the day at A$1.36.

Owing mainly to Albemarle’s interest, Liontown’s share price traded as high as A$3.15 in June 2023.

Yet the failed takeover bids occurred in multiple stages, with Albemarle facing resistance at various premium prices. Despite multiple rejections, Albemarle was granted a look at Liontown’s books with a final bid of A$3 in September.

However, the opposing stake built by Gina Rinehart, Australia’s wealthiest person, rendered Albemarle’s scheme bid ineffective. This stand-off led to the withdrawal of the A$6.6 billion takeover proposal in mid-October, eventually sending the price as low as A$1.24 by early December.

At Lionheart's annual general meeting in November, CEO Tony Ottaviano stated that he was unaware of Rinehart's overall strategy.

Rinehart also worked through a similar scenario for Azure Minerals (AZRMF), blocking SQM's (NYSE:SQM) A$1.7 billion takeover to work out a partnership deal eventually. However, Albemarle's stake sale ends speculations about a similar deal.

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Liontown’s main projects, Kathleen Valley and Buldania, are critical to the company’s future endeavors. The Kathleen Valley Lithium Project, situated nearly 60km north of Leinster in Western Australia, is a Tier-1 battery metals asset with one of the world’s largest and highest-grade hard rock lithium deposits.

The project is expected to produce around 500,000 tons of 6% lithium oxide concentrate annually, along with Tantalum Pentoxide.

The Buldania project, located south of Kalgoorlie in Western Australia, has confirmed mineral resource estimates of 15 million tons of 1.0% Lithium oxide (Li2O). Despite the setback in Albemarle’s acquisition plans, Liontown remains actively engaged in advancing its lithium projects, contributing significantly to the burgeoning lithium industry.

Apart from Rinehart's Hancock Prospecting, Goldman Sachs Group (NYSE:GS) heavily traded Liontown's shares, disclosing over 37.6 million added shares. The largest individual shareholder, non-executive chairman Timothy Rupert Goyder, also boosted his stake in 2023, adding over 7 million shares and building his stake to 13.86%.

Also Read: Foremost Lithium’s (NASDAQ:FMST) Strategic Advancements Fueling The Clean Energy Future

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Posted In: ALB FMST GS SQM