SYDNEY, Oct 6 (Reuters) – Australian billionaire Gina Rinehart raised her stake again in lithium producer Liontown Resources (LTR.AX), giving her enough leverage to possibly block U.S. miner Albemarle Corp’s (ALB.N) $4.3 billion proposed takeover of the company.
Australia’s richest person raised her stake to 16.7%, becoming Liontown’s largest shareholder, her company Hancock Prospecting said on Friday.
“Hancock welcomes the opportunity to participate in the Kathleen Valley project as a shareholder, and have an influence on the company’s overall future direction – including where decisions are to be made by shareholders,” the company added.
Liontown’s Kathleen Valley lithium project in Western Australia is regarded as one of the world’s most promising deposits of the metal used in electric vehicles and smartphones. The developer has already agreed to supply U.S. car giant Ford (F.N) with the battery raw material
Rinehart has not said publicly whether she supports or opposes the takeover bid and a spokesperson declined to comment on whether the increased stake would be used to block Albemarle’s bid.
But she has steadily built a position in Liontown since early September, when Albemarle (ALB.N), the world’s biggest lithium producer, was granted access to Liontown’s books after revising a takeover proposal.
Liontown and Albemarle declined to comment on the increased Hancock stake.
Albemarle’s latest bid of A$3 ($1.91) per share, made through a scheme of arrangement, requires 75% support from Liontown investors voting in the ballot. A stake of between 15% and 20% can often become a blocking stake depending on investor turnout on the day of the shareholder meeting.
Albemarle’s declared its bid ‘best and final’, which means the current offer cannot be raised and the bidder would have to walk away for some time before returning with a sweetened deal.
News of the increased Hancock stake came after Australian market trading closed, but Liontown ended trade up 1% at $A2.99 per share. The stock has rallied from around A$2.62 when the latest Albemarle bid emerged in early September.
Albemarle was granted four weeks of due diligence from Sept. 11 and local media reports said that access was due to expire on Friday.
The U.S.-based firm initially bid $A2.20 per share for Liontown in October last year, before sweetening its bid to $A2.35 and then $A2.50, which were rejected by the takeover target’s board in March.
Hancock said it had no plans to nominate directors at Liontown’s upcoming annual general meeting in November but remained open to doing so in the future, especially “if its strategic stake continues to increase towards 19.9%,” the company said in a statement.
Hancock will have to declare its intention for its investment in Liontown if its stake goes above 19.9%.
The recent buying means Hancock replaces previous largest shareholder Liontown Chairman Tim Goyder, who holds 14.97% of the miner.
($1 = 1.5716 Australian dollars)
Reporting by Scott Murdoch and Lewis Jackson in Sydney; additional reporting Brijesh Patel; Editing by Edmund Klamann, Susan Fenton and Kim Coghill
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