Lithium One Board Recommends Merger with Galaxy Resources

The Lithium One Inc. (TSXV:LI) Board of Directors maintained its recommendation that the holders of Lithium One securities vote in favour of the plan of arrangement whereby a wholly owned subsidiary of Galaxy will acquire all of the outstanding securities of Lithium One.

As quoted in the press release:

Galaxy announced on April 12, 2012 that it had successfully raised A$30 million (before costs) via a placement of ordinary shares (“Financing”) to institutional and sophisticated investors. The Financing will settle on April 23, 2012. In addition Galaxy is seeking to raise a maximum of A$3 million via a Share Purchase Plan, which is open to existing Galaxy shareholders. Following the announcement of the Galaxy Financing terms, the exchange ratio was increased such that upon the effective date of the Arrangement, holders (“Shareholders”) of common shares of Lithium One (the “Common Shares”) will be entitled to receive, in exchange for each issued and outstanding Common Share, 1.96 Galaxy Shares.

The Arrangement will be carried out by way of a statutory plan of arrangement pursuant to the Business Corporations Act (Ontario) and must be approved by the Court of Queen’s Bench of Ontario and the affirmative vote of Lithium One’s security holders at a special meeting to be called by management of the Company. At the meeting, the Arrangement will require approval of (a) Shareholders holding at least 66 2/3% of the common shares, voting in person or by proxy; (b) Shareholders and Optionholders holding at least 66 2/3% of the common shares and Options represented at the meeting, voting together in person or by proxy; (c) Noteholders holding 66 2/3% of the principal amount of the Notes represented at the meeting, in person or by proxy; and (d) a majority of the minority, in accordance with National Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

The Arrangement is expected to close in late May or early June 2012, shortly after receipt of all security holder and court approvals. Pursuant to the terms of the Arrangement, it is expected the shares of Lithium One will be de-listed from the TSX-V.

Click here to read the Lithium One Inc. (TSXV:LI) press release