Friday, June 14, 2024

Australia’s richest person raises stake in lithium producer, threatening $4.3bn takeover

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Gina Rinehart has lifted her stake in Liontown Sources, as Australia’s richest individual seeks to muscle in on a proposed takeover of a lithium mine developer by Albemarle, the world’s largest producer of the battery steel.

Rinehart’s Hancock Prospecting raised its shareholding to 18.36 per cent in Liontown, up from 16.69 per cent, because the iron ore and agriculture magnate seeks to achieve publicity to the commodity utilized in electrical automobile batteries, based on a inventory market submitting on Tuesday.

The Australian billionaire has thrown Albemarle’s $4.3bn takeover proposal for Liontown into jeopardy at a time when lithium costs have slumped virtually 70 per cent this 12 months due to quickly rising provides and a pullback in Chinese language demand.

Albemarle would wish at the least 75 per cent of voting shareholders’ help for the deal to go, making it possible that Rinehart may block the US firm’s takeover proposal since many buyers don’t sometimes vote.

Rinehart rose to prominence by reviving iron ore enterprise Hancock Prospecting, based by her father Lang Hancock in 1955, and reworking it into Australia’s largest personal firm.

Whereas it’s clear that Rinehart — nicknamed the “iron woman” for her steely character and the commodity that fashioned the bedrock of her fortune — is working to diversify into lithium, she has remained silent on her precise intentions.

Business analysts have speculated that she would possibly wish to elicit a better value from Albemarle — who stated its fourth provide in September was “finest and closing” — companion with the worldwide lithium chief in a three way partnership, staff up with someone else and even go it alone in buying Liontown.

Underneath Australian takeover regulation, if Rinehart’s stake exceeds 19.9 per cent, she will probably be obliged to make a rival bid for Liontown, which is growing a big underground lithium deposit in Western Australia.

Nevertheless, Hancock has an extended historical past of joint ventures on just about the entire property that it owns, making some type of partnership the probably final result and Albemarle a fascinating companion for its experience in chemical processing.

Hancock stated final week that it “stays open to nominating administrators to Liontown’s board sooner or later and notably if its Strategic Stake continues to extend in the direction of 19.9 per cent,” suggesting that it’s unlikely to choose to make a full takeover bid for now.

In Hancock’s first public assertion about Liontown in September, it stated that the corporate may contribute to the lithium firm’s future path “alongside different Liontown shareholders, together with in relation to potential funding alternatives for downstream worth add in Western Australia”.

The opposite foremost shareholders in Liontown are chair Tim Goyder and Albemarle, whereas the rest of the publicly disclosed shareholders are passive funds that may not be concerned in working a mine.

Albemarle’s interval of exclusivity with Liontown, which granted it time to determine whether or not to show its non-binding proposal right into a finalised provide, is about to come back to an finish on Wednesday.

The strikes by Rinehart come after Chris Ellison, managing director of mining group Mineral Sources and a collaborator with the Australian mining mogul on earlier offers, restructured a three way partnership with Albemarle.

As a part of the revised deal, Ellison is pulling again from investing in Chinese language lithium refineries to attempt to construct his personal lithium processing plant, ideally in Australia, he stated on an organization earnings name.

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