Perth-based explorer Lithium Australia has lodged a takeover bid for rival lithium-focused Lepidico - in the middle of a Supreme Court battle between the two companies - in an all-scrip deal that values the target at $23.8 million.
Lithium has offered one of its shares for every 13.25 Lepidico shares, with the value of the acquisition based on Lithium’s last closing price of 18 cents per share.
The value of the deal represents a 9 per cent premium to Lepidico’s 10-day volume-weighted average price.
Lepidico is yet to disclose to the market its position on the deal; however, shareholders owning a combined 17.8 per cent stake in the target, including West Perth-based Parkway Minerals, which owns 97 million shares in Lepidico, have agreed to accept the bid in absence of a superior deal.
Lepidico was acquired by ASX-listed, gold-focused Platypus Minerals in a reverse takeover late last year, with Platypus changing its name to Lepidico and changing its focus to lithium.
Through the acquisition, Platypus also gained ownership of Lepidico’s L-Max process technology, which recovers lithium carbonate from lithium-bearing mica minerals. Lithium Australia had obtained a licence for the use of this technology at its Cinovec project.
However, the two companies are locked in a Supreme Court battle, with Lepidico alleging that Lithiun’s SiLeach process technology was developed using the L-Max intellectual property without authorisation.
“The litigation relating to processing technology is distracting and expensive and although Lithium Australia is confident of a positive outcome, the time and resources currently dedicated to the legal processes would be better employed in advancing our projects and technologies in concert, and for the benefit of the shareholders of both companies,” Lithium managing director Adrian Griffin said.
“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.”
Mr Griffin said the combined company was likely to be significantly more attractive for investors and financiers.
Lithium shares were 5.5 per cent higher to 19 cents each, while Lepidico shares were 16.6 per cent higher to 1.4 cents each, at 11am.
