Albemarle’s DD runs out at Liontown; eyes on Rinehart

afr.com:

Time’s up for NYSE-listed giant Albemarle’s exclusive due diligence at Liontown Resources, and local billionaire Gina Rinehart’s rapidly accumulated 19.9 per cent stake is casting a shadow on a big payday for investors.

Liontown boss Tony Ottaviano. 

It is understood Albemarle’s hard-earned look at Liontown’s books – attempts for which started with a $2.20 a share bid back in October 2022 – would expire on Thursday.

On Wednesday evening, sources reckoned there’s almost zero chance Albemarle would turn up with a binding bid, what with Rinehart camp’s implicit suggestions it doesn’t support the takeover. Case in point: Rinehart camp’s decision to build a blocking stake at bid price; saying it sees the Liontown stake as “strategic”; and saying it wants to be involved with “other shareholders”.

With a 19.9 per cent shareholder in opposition for a scheme bid there’s no reason for Albemarle to make its $3 a share offer binding – that would be like asking for a failed scheme vote and potentially a break fee to boot.

In other words, what should have been the D-Day for Liontown investors will probably pass without aplomb.

And so, the NYSE-listed giant is likely to ask for a due diligence extension while it figures out what to do with Rinehart’s opposition. On the surface, Albemarle could bring downstream processing and marketing expertise while Rinehart could lead on project delivery.

Needless to day, despite being a long time in the making, it’s proving to be a hard deal for Albemarle and its adviser JPMorgan to bed down.

Greenhills and law firm Allens are advising Liontown. JPMorgan and Corrs Chambers Westgarth are on the Albemarle side.

On September 11, the NYSE-listed giant finally won a look at the books with a $3 a share