Albemarle Corporation (Charlotte, N.C.) confirmed that it will be working toward the execution of a binding agreement to acquire Liontown Resources Ltd.(Liontown).
Albemarle notes the announcement to the ASX by Liontown and confirms that it submitted a best and final non-binding proposal, in the absence of a superior proposal, to acquire all outstanding shares of Liontown by way of scheme of arrangement for A$3.00 cash per share (The Revised Proposal). The Revised Proposal values Liontown at A$6.6 billion or US$4.3 billion on an equity value basis.
The Revised Proposal is subject to several conditions, including:
– Satisfactory completion of confirmatory due diligence by Albemarle;
– Entry into a binding scheme implementation deed (SID) that will be subject to closing conditions, including obtaining Australian regulatory approvals and Liontown shareholder approval; and
– Final Albemarle board approval to enter into the proposed transaction on a binding basis.
The Revised Proposal delivers an immediate premium for Liontown investors and is expected to drive significant value creation for Albemarle shareholders. The transaction is consistent with Albemarle’s long-term growth and stated M&A strategy, as well as its disciplined approach to capital allocation and risk-adjusted value accretion. The Revised Proposal was unanimously approved by Albemarle’s Board of Directors.
Pending successful due diligence and negotiation of a binding SID, the proposed acquisition of Liontown would:
– Enhance the scale of Albemarle’s industry-leading Energy Storage business and build on Albemarle’s world-class resource base
– Expand Albemarle’s strong position in Australia, where the Company has significant expertise, including world-class spodumene resources and lithium conversion facilities at Greenbushes and Wodgina and Kemerton, respectively
– Increase opportunity to meet rapidly growing lithium demand driven by electric vehicles and other end markets
The Liontown Board has confirmed to Albemarle that, subject to entry into a mutually acceptable non-disclosure and exclusivity agreement, it intends to grant Albemarle an opportunity to conduct a limited period of exclusive due diligence, subject to customary fiduciary exceptions, to enable it to put forward a binding proposal. Should Albemarle make a binding proposal at $3.00 per share, the Liontown Board intends to unanimously recommend that Liontown shareholders vote in favor of the Revised Proposal, in the absence of a superior proposal, and subject to the parties entering into a mutually acceptable binding SID, the completion of Albemarle’s due diligence to Albemarle’s satisfaction, and an independent expert concluding (and continuing to conclude) that the Revised Proposal is in the best interests of Liontown shareholders.
Albemarle and Liontown will enter into a mutually acceptable non-disclosure and exclusivity agreement granting Albemarle with an exclusivity period to undertake confirmatory due diligence and negotiate a binding SID.
The Revised Proposal is non-binding and there is no certainty that any transaction will be agreed to or will proceed.
Albemarle’s capital allocation priorities remain investing in high-return organic and inorganic growth, maintaining its financial flexibility and investment grade credit rating, and funding its dividends.
With relation to the transaction, Albemarle has engaged J.P. Morgan as lead financial advisor, with Barrenjoey also serving as financial advisor. Corrs Chambers Westgarth and Shearman & Sterling LLP are serving as legal advisors.