On Monday (February 6), Lithium Australia launched a $23.8-million takeover bid for Lepidico (ASX:LPD). The companies are in the midst of a Supreme Court battle, and the offer is aimed at ending the dispute. It centers on allegations that Lithium Australia’s SiLeach process was developed using Lepidico’s L-Max intellectual property without permission.
According to a Lithium Australia press release, the company has offered one share for every 13.25 fully paid Lepdico shares. The bid represents a 13-percent premium to the share prices of both companies as of close of trading on February 3, and is a 9-percent premium on the 10-day volume-weighted average price of both companies.
“LIT believes that combining the companies is in the interests of shareholders of both companies as it will bring LIT’s Sileach process and LPD’s L-Max process as well as each group’s other intellectual property under common ownership,” the release states.
Adrian Griffin, managing director at Lithium Australia, says in the release that the two companies have similar business strategies with exceptional exploration projects and development prospects.
“It is the synergies in aspirations and assets that make combining the two companies the perfect opportunity for all shareholders,” he notes. “The combined entity is likely to be significantly more attractive for investors and financiers as well as a global leader in lithium processing at a time of unprecedented lithium demand.”
For its part, Lepidico announced Monday that it “has become aware” of Lithium Australia’s intentions. In its statement, Lepidico advises its shareholders to take no action in relation to Lithium Australia’s announcement, and says that it is considering its response.
“Lepidico wishes to clarify a disclosure made in the Announcement and confirms that it is not in negotiations with Lithium Australia to achieve a merger,” the statement reads.
Lepidico has said it will inform its shareholders of developments as they arise.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Lithium Australia is a client of the Investing News Network. This article is not paid-for content.