Allkem and Livent bosses face down criticism of $16b lithium merger

afr.com:

Senior executives at Allkem and Livent say investors are supportive of the $US10 billion ($16 billion) merger between the two mining groups despite increasing concerns that volatility in the lithium price is making the deal, struck in May, increasingly unattractive to the former’s shareholders.

Allkem managing director Martín Pérez de Solay and his Livent counterpart, Paul Graves, are in Australia to meet investors this week before a shareholder vote on the deal on December 19. There have been – so far limited, but growing – calls for the deal to be reconsidered, and it has been described by Jefferies analysts as a “cheap reverse acquisition of Allkem”.

Livent chief executive Paul Graves and Allkem boss Martin Perez de Solay are united on merger plans. Edwina Pickles

Some local fund managers are also unhappy that Allkem will account for only 56 per cent of the combined entity – to be known as Arcadium Lithium – and that the merged group’s primary listing will be in New York.

“It is looking increasingly unattractive,” said Raphael Lamm, co-chief investment officer at Melbourne’s L1 Capital, which holds Allkem shares.

Allkem shares are down 30 per cent at $9 since the all-scrip deal was struck.

But Mr Pérez de Solay said he had not received negative feedback from shareholders, and most analysts continued to back the merger. The companies released a 630-page document explaining the merger late last week, which included approval by independent expert Kroll.

Mr Graves said criticism of the deal was isolated to a few voices and claims that Livent should be paying a larger control premium were misguided.

“The market is speaking pretty clearly about its support for the deal,” he said in an interview from Sydney on Sunday. “It is