Published: March 30, 2023 | Share This

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Australia’s Liontown Resources rebuffed an indicative offer from top lithium producer Albemarle Corp. that valued the lithium developer at A$5.50 billion ($3.66 billion) on Tuesday, sending its shares soaring 59 percent.

Albemarle had offered A$2.50 per share, Liontown said in an exchange filing. The offer represented a 63.9 percent premium to the ASX-listed company’s last close. Its shares climbed 59 percent in early trading to A$2.42.

“(The Liontown board) unanimously determined that (the proposal) substantially undervalues Liontown, and therefore is not in the best interests of shareholders,” the company said.

Lithium demand is expected to soar in coming years as supplier scramble to meet surging demand from automakers switching to electric vehicles.

Benchmark lithium prices have jumped more than six-fold over the past two years, before turning down lately due to a drop in electric vehicle sales in top market China.

Liontown said it had received two prior proposals from Albemarle. The first offer of A$2.20 per share was on Oct. 20 last year and the second of A$2.35 was earlier this month.

Albemarle did not immediately respond to a Reuters request for comment.

Liontown controls two major lithium deposits in Western Australia, including its flagship Kathleen Valley project. The project is one of the world’s largest and highest-grade hard rock lithium deposits, according to the company’s website.

First production at the project is expected in the second quarter of 2024.

Liontown has inked supply agreements with Ford Motor Co., Tesla, and the battery unit of South Korea’s LG Chem.

Liontown also said RT Lithium Ltd, a subsidiary of Albemarle, had built a stake through on-market purchases. RT Lithium now holds a near 2.2 percent stake in Liontown.

Charlotte, North Carolina-based Albemarle is the world’s largest lithium producer with major facilities in Chile, China and Australia.

Source: Reuters

About Liontown Resources
Liontown Resources Limited engages in the exploration, evaluation, and development of mineral properties in Australia. The company explores for lithium, gold, vanadium, copper, and nickel deposits, as well as platinum group elements. Its flagship property is the Kathleen Valley lithium project located in Perth, Western Australia. The company was incorporated in 2006 and is based in West Perth, Australia.

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