Tailson buyout14 Apr 2013 15:10
China to Secure One-third of Global Lithium Supply: Talison Buyout Finalized
http://lithiuminvestingnews.com/7162/china-global-lithium-supply-talison-buyout-finalized-rockwood-tianqi-australia/
Industry consolidation
“There are those that believe that Tianqui overpaid for Talison, but the Chinese don’t care about the price — they want control of the commodity,” Chris Berry, founder of House Mountain Partners, told Lithium Investing News in an email.
Consolidation, Berry said, is something that we are likely to see more of in the lithium space.
“The industry is going to get smaller, with fewer companies needed, unless we see a sustained spike in lithium demand — something I view as unlikely, ” Berry said. “The lithium market is really an oligopoly and is fully supplied by the few producers at the top of the supply chain.”
Where does this leave Rockwood?
Berry explained that while it is crucial for Rockwood to secure its own supply of lithium, “Rockwood has quality assets in Nevada and in South America currently, so I think the bid for Talison was a ‘nice to have’ rather than a ‘must have.’”
Though Rockwood’s bid for Talison has been knocked off the table, it remains to be seen whether the company will make a play for another lithium company. As of the end of 2012, Rockwood was sitting on $1.3 billion in cash, waiting for the Talison deal to fall through.
China's state-owned enterprises obtain FIRB approval by stealth
(Google the headline to get the full story)
http://www.theaustralian.com.au/business/opinion/chinas-state-owned-enterprises-obtain-firb-approval-by-stealth/story-e6frg9kx-1226595937750
"FOREIGN Investment Review Board watchers are wondering whether Chinese state-owned entities have found a new way to approach investment in Australia -- obtain FIRB approval for an acquisition by a private Chinese company and then change the transaction structure to bring in an SOE as an equity participant...
Sundance is not an isolated change of a transaction structure subsequent to FIRB approval.
Chengdu Tianqi, controlled by chairman Weiping Tiang and his wife, last November obtained a board recommendation for a scheme of arrangement offer of $C7.50 a share, or $C858 million, for Talison Minerals, the world's largest producer of spodumene, a high purity lithium ore, from its mine at Greenbushes in WA. It topped an earlier recommended offer of $C6.50 a share from US group Rockwood Holdings.
Talison is an Australian incorporated company which is listed on the Toronto Stock Exchange, but not on the ASX. At the time, Tianqi said it already had the necessary Chinese regulatory approvals, including from NDRC and had signed commitment letters to support the required funding, including from CDB and an ADM Capital advised lender.
Talison shareholders approved the transaction at the scheme meeting on
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