Liontown Resources (ASX:LTR) seeks funders after Albemarle takeover fails amid Rinehart raid

Liontown Resources is assessing new funding options for its flagship Kathleen Valley lithium project after the world’s biggest lithium company withdrew a $6.6 billion takeover bid for the Western Australian company after a share raid by WA billionaire Gina Reinhart.Liontown said Albemarle (NYSE:ALB) withdrew its $3-a-share takeover proposal due to “complexities associated with executing the transaction.” The company, chaired by small cap whisperer billionaire Tim Goyder, reported its now former suitor had confirmed its favourable view of the Kathleen Valley project and management.

Western Australian company Liontown seeks alternative funding sources for its flagship project 60 kilometres north of Leinster, in WA’s Goldfields region. Sources have reported the company is expected to seek funding from debt and equity capital markets, with Fairfax saying Liontown has brought in UBS to help out. Liontown has estimated it will cost $951 million to start producing at Kathleen Valley, while other estimates have put the true capital cost in the $1 billion mark.

The Reinhart family’s interest in Liontown through a Hancock Prospecting investment vehicle is 18.36%.
Last week, lithium industry expert “Mr Lithium” Joe Lowry told Market Open he believed Gina Reinhart had a plan for Liontown.

“[She could] partner with MinRes (her frenemy Chris Ellison) or even do a deal with ALB (least likely but possible outcome),” he said.
“Lithium Drama … replaces Drama in the Atacama.”

Drama in the Atacama is the name given to the “telenovela” of difficulties companies such as Albemarle faced in Chile in their bid to extract and commercialise lithium in the country. Liontown chairman Goyder holds 15%.

The company’s shares were down to $2.78 lows in morning trade today after closing at $3 averages up to a week ago.

The company has put its shares in a trading halt as it prepares to share an announcement expected by Wednesday.

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