Liontown (ASX:LTR) surge on Albermarle rejection
March 28, 2023Liontown Resources has thrown a hostile bid from rival Albermarle to the kerb — its vehement rejection of the $2.50 per share offer speaking volumes about the takeover target’s boardroom sentiment.
Liontown mentioned Albermarle’s opportunistic timing in making its lowball offer during a period of softness in the lithium market.
The latest lithium estimates forecast demand to grow fivefold by 2030 and an impending supply deficit to drive higher lithium prices for longer.
$0.69It is sure to be taken as a rallying cry from a sector that has suffered a 53 per cent drop from last November’s record-high lithium prices, particularly in a safe Australian jurisdiction that remains one of the most attractive to mine on earth.
And it is not alone in getting a hefty share price bump, with lithium explorers including Forrestania Resources, Charger Metals, Core Lithium, and Loyal Lithium all enjoying share price rises close to 20 per cent.
The latest findings from Future Battery Industries CRC found demand for battery metals is outpacing past estimates by a massive 64 per cent. The centre says Australia is uniquely positioned to keep its world-leading production at home and leverage resources into a multi-billion-dollar battery industry.
Liontown had already rejected proposals from the US manufacturing giant in times of higher trading prices. The company recently became aware that its would-be buyer has been silently building a stake in Liontown by on-market purchases through subsidiary RT Lithium – now holding 2.2 per cent of issued shares.
The company remains on pace for the first production from its 156 million tonne Kathleen Valley resource mid-way through 2024. Its neighbours will no doubt keep an eye fixed on how much global-scale manufacturers are willing to dish out to claim hard rock Australian lithium.
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