Is the acquisition of Liontown, an Australian lithium mining company, by the lithium industry giant Albemarle in jeopardy due to the opposition of Australia's richest woman?
On October 10th, Hancock Prospecting, a company owned by Australia's richest woman Gina Rinehart, increased its stake in Liontown from 16.69% to 18.36%.
This move has also posed challenges to Albemarle, the world's largest lithium mining company, in its acquisition of Liontown.
As mentioned by Wall Street News earlier, on September 4th, the board of directors of Liontown Resources, an Australian lithium mining developer, announced that it would accept Albemarle's new acquisition offer of AUD 6.6 billion (approximately USD 4.3 billion), at AUD 3 per share. This offer represents a 20% premium compared to the valuation of Liontown in March this year, which was only AUD 5.5 billion at AUD 2.5 per share.
Albemarle also stated in its announcement that this acquisition will provide a direct premium for Liontown's investors and is expected to create significant value for Albemarle's shareholders. In addition, it will expand its business scale and establish a world-class resource base, thereby enhancing Albemarle's strong position in Australia.
It is worth noting that Albemarle's acquisition requires the support of 75% of Liontown's shareholders. Rinehart's increased stake may put Albemarle in a passive position. Analysts point out that a considerable number of shareholders may choose not to vote, in which case Rinehart's shareholding will have a significant influence on the outcome.
On the other hand, if Rinehart decides to further increase her stake in Liontown to 19.9%, according to Australian merger and acquisition laws, she will be obliged to make a competitive bid for Liontown and propose a more competitive offer.
Analysts speculate that Rinehart's move is aimed at encouraging Albemarle to further increase its offer for Liontown, rather than intending to acquire Liontown herself.
Last week, Hancock released a statement stating that if it further increases its stake to around 19.9%, it may continue to nominate directors to Liontown's board. This indicates that it is unlikely to launch a comprehensive takeover bid at this time.
In September, in its initial public statement regarding Liontown, Hancock stated that it can contribute to the future development of the lithium company together with other shareholders of Liontown, including investment opportunities in downstream value-added projects in Western Australia.
The world's largest lithium producer has been repeatedly defeated.
In terms of production capacity, Albemarle, based in Charlotte, North Carolina, is the world's largest lithium producer. It has lithium mineral resources worldwide and possesses the most optimal lithium mineral assets globally.
However, Albemarle's acquisition plan for Liontown has been rejected multiple times.
On March 28th of this year, Albemarle submitted a non-binding acquisition offer, intending to acquire all the shares of Liontown at a price of AUD 2.5 per share, with a total value of approximately AUD 5.5 billion (approximately CNY 25.6 billion).
At that time, the offer price represented a premium of over 60% to Liontown's closing price on that day, but it was still rejected by Liontown's board of directors. The board of directors of Liontown stated:
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&#34;The proposal significantly undervalues Liontown and is not in the best interests of shareholders.&#34;
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Prior to the offer in March, Liontown had already rejected Albemarle's offer proposals of AUD 2.2 per share and AUD 2.35 per share. The company believes that with the expected growth in global lithium demand, supply shortages will continue to drive lithium prices higher. Albemarle's acquisition timing is seen as opportunistic, as it comes during a period of rising development costs due to contractor shortages.
In March of this year, an Australian mining website quoted industry experts as saying that Liontown publicly announced its acquisition offer in October 2022 to stimulate bidder participation and achieve a target price of AUD 3 per share. Based on the latest acquisition offer reached, the offer price has reached Liontown's acceptance level.

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