The Liontown Resources Ltd (ASX: LTR) share price is currently halted after the business announced that Albemarle Corporation (NYSE: ALB) had walked away.
Liontown Resources Ltd (ASX: LTR) share price
Albemarle is one of the world’s largest lithium businesses and was looking at acquiring ASX lithium share Liontown. Things became complicated when Gina Rinehart‘s Hancock Prospecting built up a large position in the business.
Albemarle ends takeover interest
Liontown was looking at a takeover price of $3 cash per Liontown share from Albemarle, which was announced on 4 September 2023.
Albemarle has told Liontown that it has withdrawn its proposal and that it will not be proceeding with its proposed acquisition.
The North American lithium giant said that its decision to withdraw the proposal was due to the “growing complexities” associated with executing the transaction.
Albemarle has confirmed to Liontown that it has a favourable view of the flagship Kathleen Valley project and Liontown’s management.
Liontown shares went into a trading halt to “allow for the finalisation of funding associated with the Kathleen Valley project.” Perhaps this is for a capital raising.
Growth project to continue
Liontown is committed to delivering on its strategic plan and is “confident on its ability to thrive independently.”
The board of directors and leadership team said they are maintaining an absolute focus on delivering the Kathleen Valley lithium project into production, maximising the full potential from Liontown’s assets including downstream potential and creating long-term value for all shareholders.
Management commentary
The Liontown Managing Director and CEO Tony Ottaviano said:
We acknowledge Albemarle’s decision. They were constructive and respectful throughout the diligence process. Notwithstanding, our position to maintain momentum on our base plan has allowed us to keep line of sight of first production from the Kathleen Valley Project in mid-2024. The board remains focused on delivering outstanding performance and value to its stakeholders.
Final thoughts on the Liontown share price
It’s not surprising that the ASX lithium share is looking to raise money at this elevated price. I think it’s a wise move by the business. Short term pain for lithium miners could be wise time to consider investing seeing as lithium demand is expected to keep growing in the long-term, though Liontown wouldn’t be my first pick.
I like the look of Pilbara Minerals Ltd (ASX: PLS) and Mineral Resources Ltd (ASX: MIN) more.
