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Liontown rejects AU$5.5b takeover bid that sparks up lithium sector

“The Liontown board and its advisers carefully considered the indicative proposal and unanimously determined that it substantially undervalues Liontown, and therefore is not in the best interests of shareholders,” the company told the ASX in a statement."

One of the world’s largest lithium producers has sparked a resurgence in dwindling lithium stocks after it lobbed an audacious AU$5.5 billion takeover bid at West Australia’s Liontown Resources, an offer the miner’s board has promptly rejected.

New York-listed chemicals giant Albemarle said on Tuesday it would pay AU$2.50 a share for Liontown, valuing the company at AU$5.5 billion, after building a 2.2 per cent stake in the WA mining minnow through its subsidiary RT Lithium.

"The fresh bid – Albemarle has taken two previous tilts at Liontown – sent shares in the miner soaring 50 per cent in early trade to AU$2.26 before ending the day at AU$2.57, as investors digested details of the proposed buyout via a scheme of arrangement."

"Albemarle’s bid was subject to conditions before becoming binding, including Liontown providing exclusive due diligence, the board giving unanimous approval, and approval from Australia’s regulators. Its previous non-binding proposals were made on March 3 this year at AU$2.35 a share and on October 20 last year at AU$2.20 a share."

https://www.smh.com.au/business/companies/liontown-rejects-5-5b-takeover-bid-that-sparks-up-lithium-sector-20230328-p5cvvj.html

Locked up for everyone else's safety!

Yes, I had a look and my account shows the new QED ticker, so I tried to get a test sell quote, but I get a message saying I can't trade QED online and to phone them.

Not what I'd call a smooth transition, but I doubt anyone is going to loose any sleep over not being able to buy or sell today.

A successful bid at that higher offer could cause significant buying of ALL stock, as it will be clear to everyone that it's valued way too low.

LTR bid should be picked up by the brokers and used as a comparison to ALL MCap. ii's should also note the difference, either from their own research or from broker notes

Don't be surprised if a bigger offer appears for LTR, as nobody starts a bid where they see fair value, they always try to get it cheaper, and then walk the offer up if needs be until accepted.

The Q.E.D being MSAR / bioMSAR

I think QED is a big hint to investors, without actually stating anything. Either that or it's targeted at clients.

"Q.E.D. is an acronym for the Latin phrase quod erat demonstrandum, a fancy way to show off you just logically proved something"

Yes, excellent news. With £10m in the bank and increasing continuously, I was expecting something like this, maybe not as quickly but not complaining!

WS,

With the really low overheads of QFI and it's licencing model, dividends could come quite quickly once the money starts flowing in, as QFI won't have much else to spend the excess above operating costs on. And I think the BoD want to pay dividends as quickly as possible, to reward the long term shareholders that have kept on backing them. Plus of course, they hold shares too, so a nice bonus for finally achieving the success.

SR,

At the time of Maersk trial we were told that MSAR could save $1m per vessel per year. Also we were told that QFI, Refinery and Client would split the savings. So if we said QFI got a third, that's $333k/£277.5k per vessel. For a MCap of £388.9m that is 1,404, and if you said a P/E of 15 you be looking at 93 vessels. So not really pricing in Maersk with around 600 container ships at the time.

"QFI estimates that MSAR will save container vessel owners $1m/vessel/year in fuel costs"
https://www.edisoninvestmentresearch.com/?ACT=18&ID=6263&LANG=

"As of 2023, MSC operates 721 container vessels"
https://en.wikipedia.org/wiki/Mediterranean_Shipping_Company

In a few years, the dividend will me more that today's share price, think about that.

AKHM,

Absolutely!!

Leading up to the Maersk trial, with no sales other than trial volumes, the price shot to 51.25p making the Market Cap £388.9m.

The Market cap today is just £21m.

£388.9m is 18.52x the current Market Cap.

At a MCap of £388.9m the share price today would be 27.64p. That's an increase of 1,736.55%.

So at 1.505p today, there is staggeringly more upside available here than downside, especially when we are on the cusp of commercial sales to Morocco, starting a trial with MSC, and have a new Carbon reducing fuel at exactly the right time for the shipping industry.

If Morocco and MSC go to commercial sales, a MCap much higher than £389.9m is obviously possible. It could be 2x that, then 3x that, then even 4x that as rollout to more and more vessels and power plants is seen. I suspect most here will have long sold out, but for those looking at QFI as a pension pot with several years before they retire, they could do worse that to keep some or even all of their QFI holding for the long LONG term.

A few MMU's and some bioMSAR looks far cheaper to me.

https://www.power-technology.com/news/hinkley-point-c-project-costs-rise-again

How long does it take to build a new Nuclear Power plant (including the standard 10 years of delays), and how much does it cost in the end?

Time and Money that Mexico won't spend.

https://www.reuters.com/business/energy/edf-says-hinkley-point-start-now-june-2027-costs-rise-2022-05-19/

No mention of TPDC back in for Ruvuma in the ARA EGM circular

http://admin.aminex-plc.com/uploadfiles/181207_%20EGM%20Circular%20(web%20version).pdf

All I'm finding on the web is TPDC back in option for KNDL.

If there is an option, TPDC would have to pay back pro-rata exploration and development costs for their percentage. This would give cash to AEX and ARA based on what each has spent so far, and would if left in the pot, increase AEX's $35m carry.

HY,

I do remember something in an RNS saying the Government was not going to take up it's option of a bigger slice, prior to or during the ARA farm out process.

This would IMVHO be because the Government did not want a higher exposure to the risks of exploration and development, instead sticking to owning the Infrastructure such as pipelines and processing plants.

I think the option might have expired or been removed during the ARA farm out, once the Government said it wasn't going to exercise it, but best to check that with AEX.

The 2 analysts offering 12 month price targets for Union Jack Oil PLC have a median target of 66.00, with a high estimate of 66.00 and a low estimate of 66.00. The median estimate represents a 169.39% increase from the last price of 24.50.

https://markets.ft.com/data/equities/tearsheet/forecasts?s=UJO:LSE

All of the upside over the coming year is covered with existing cash. Over that year UJO will accrue another years worth of cash, and so on. Hence this is a great investment longer term, as the chances of dilution are negligible, whilst profits will just keep rising, and dividends paid out.

250,000 is not a major holding, not by a long way. There's plenty of PI's around with far more than that.