Lithium giant Albemarle Corp. has been granted a short extension to wrap up its due diligence of Liontown Resources Ltd. for a proposed A$6.6 billion ($4.2 billion) takeover of the Perth-based company, with the success of the deal now looking like it will hinge on the next move of Australia’s richest woman.
(Bloomberg) — Lithium giant Albemarle Corp. has been granted a short extension to wrap up its due diligence of Liontown Resources Ltd. for a proposed A$6.6 billion ($4.2 billion) takeover of the Perth-based company, with the success of the deal now looking like it will hinge on the next move of Australia’s richest woman.
Liontown said in a statement that it had agreed to extend the deadline by seven days following a request from Albemarle, and acknowledged that due diligence was at this stage “substantially complete.”
Due diligence had previously been scheduled to end this week. Liontown’s shares fell as much as 4.1% on Thursday, the most in six weeks, before paring losses to trade 1.7% lower at A$2.87 apiece as at 12:27 p.m. Sydney time.
The extension comes amid doubts over whether the US-based battery-metal producer will be able to corral sufficient support from shareholders after billionaire Gina Rinehart built up a 19.9% stake in Liontown over the past month — big enough to potentially block the takeover.
While Rinehart’s intentions are as yet unclear, the mining magnate’s privately-held Hancock Prospecting Pty. said on Wednesday it had “achieved its strategic stake objective” in accumulating 19.9% of Liontown, and added it looked forward to having a “prominent influence” on its future.
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Rinehart’s purchase has complicated Albemarle’s bid for the company. The world’s biggest producer of lithium has been circling Liontown for months, hoping to expand in Australia and add production, and was granted due diligence in early September after raising its cash offer by 20% to A$3 per share.
Albemarle’s next step would normally be to secure a binding deal with Liontown once due diligence is complete.
(Updates with share price in third paragraph)
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