Ground Breakers: Sleepy Liontown pours cold water on takeover talks

Liontown rebuffs claims a second bidder has flown in for the hopeful lithium miner after rejecting premium Albemarle offer on March 28
LTR shares have charged 80% since the bid was revealed as investors bay for a higher offer to fall
Materials down 0.47% amid dry day on market

Whether a fresh bid will be flying in for Liontown Resources (ASX:LTR) is one of the big questions on the lips of lithium investors.

Also on those of speculators, investment bankers and business journos, all of whom are keen to get a slice of the action on what will be one of the biggest deals this year if it proceeds.

To outline the state of play — Tim Goyder’s Liontown received two bids from US lithium giant Albemarle before rejected a third at $2.50 a share in March, valuing the junior at over $5 billion and representing a more than 13,000% gain for the one-time penny stock over the past five years.

Attractive? Sure, but not good enough for the prospective lithium miner, which plans to open its $895 million Kathleen Valley spodumene mine in WA’s Goldfields in mid-2024.

With LTR shares trading well above the offer price at $2.76 today, it is believed to want somewhere in the order of $3 to head to the negotiating table.

Liontown’s shares have risen a ridonculous 80% since the bid landed. But since then it’s also been quiet … too quiet.

Whether anyone other than Albemarle would play ball at those prices remains to be seen, and really depends on how bullish they are about the future deficit in lithium as internal combustion engine vehicle bans roll in from the end of the decade, forcing a consumer switch to electric vehicles effectively run on lithium-ion batteries.

ALB reports its quarterly results tomorrow, and if it walks away then the fluff the bid’s reveal in March gave not only LTR but the wider lithium market — at a time prices were falling hard — could disappear into the wind.

Reports emerged in the AFR’s Street Talk yesterday of a potential second bidder rejected by Liontown last month.

The company has been quick to diffuse those rumours, issuing a statement to the ASX this morning that it has not received any takeover proposals, indicative or real, since rejecting Albemarle on March 28.

The chase continues.

Liontown Resources (ASX:LTR) share price today:

And on the markets

That little tidbit made Liontown one of the top gainers at just 1.48% on a pretty dry morning for the materials sector, with fellow lithcos Allkem (ASX:AKE), IGO (ASX:IGO) and Lake Resources (ASX:LKE) in lockstep and the index down 0.47%.

The three big iron ore miners were all in the red, but any real signals for iron ore will be muted for a couple of days still with China on holiday.