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Lithium Australia NL launches A$23.8M takeover of Lepidico

The offer is a 13% premium to the prices of both companies.

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The offer will be one LIT share for every 13.25 Lepidico shares

Lithium Australia NL (ASX:LIT) has outlined that it intends to make a conditional off-market scrip bid of A$23.8 million for all of the fully paid shares in fellow Western Australia lithium explorer and developer, Lepidico (ASX:LPD).

The basis of the offer will be one LIT share for every 13.25 Lepidico shares.

Adrian Griffin, managing director for LIT, commented:

"Lithium Australia and Lepidico have a similar business strategy, and both have excellent 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.

"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."


The offer

The offer is a 13% premium to the prices of both companies at close of trading on ASX on Friday 3 February 2017 and is at a 9% premium based on the 10 day VWAP of both companies.

The new entity would be the holder of one of the largest lithium exploration and development portfolios in the world, as well as holding multiple lithium processing technologies for treating both spodumene and mica mineralogies.


Shareholder support

LIT has entered into agreements with Lepidico shareholders currently holding 17.87% who have agreed to accept the bid in the absence of a higher bid.


Analysis

Driven by rising demand from new era Li-ion battery manufacturers, the combined entities would be able to offer a wide range of lithium technology solutions to match specific lithium deposits.

A combined group would be able to offer both Sileach™ and L-Max in the world’s most active jurisdiction for lithium, Western Australia, and be able to optimise emerging commercial opportunities for lithium projects worldwide.

Quick facts: Lithium Australia NL

Price: 0.13 AUD

ASX:LIT
Market: ASX
Market Cap: $116.63 m
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