What could have been one of the biggest lithium deals in recent years is now off the table thanks to stealthy maneuvering on the part of Australian mining mogul Gina Rineheart.
Albemarle Corporation, one of the leading players in the nascent field of lithium mining, has been forced to withdraw its offer to take over competitor Liontown Resources Ltd, a deal that would have cost US$4.2 billion. The Nevada-based mining company made the announcement on Monday, October 16th.
Liontown’s extensive holdings in Australia’s Kathleen Valley, one of the country’s most promising lithium deposits, were what drew the American mining firm to make an offer in the first place. Earlier this year, Albemarle began talks regarding a possible takeover, which led to Liontown accepting the former’s best offer of around US$2.00 per share just last month.
But behind the scenes, Rinehart’s Hancock Prospecting Pty was building up a massive stake in Liontown, leading to numerous complications that have prevented the finalization of the Albemarle takeover. Today, that stake stands at 19.9%, just a fraction of a point less than the 20% required to trigger a formal offer.
As a result, Rinehart is now Liontown’s single largest investor and she may have enough influence to prevent shareholders from voting in Albemarle’s favor.
But while that may be good news to Rinehart and Hancock, Albemarle’s abandonment has driven Liontown into a frenzy as it now needs to seek out a new source of capital for Kathleen Valley which, according to Hancock officials, poses numerous risks in terms of execution and operations.
For now, Liontown is working with UBS Group AG to help raise capital for Kathleen Valley and trading of its shares on the Australian Stock Market has been halted until such time that related issues have been cleared.
